JGBs Rebound as Global Bond Selloff Eases

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TOKYO, March 1 Reuters Japanese government bond prices rebounded on Monday, bringing down the benchmark 10year yield off a fiveyear high, as a global bond selloff stemming from fears of tighter monetary policies eased.

The 10year JGB yield fell 1 basis point to 0.150, slipping off Fridays high of 0.175, its highest since the Bank of Japan began negative interest rates in January 2016.

The yield curve flattened as investors also snatched up superlong bonds, with the 20year yield falling 2.5 basis points to 0.530 and the 30year yield shedding 3 basis points to 0.725.

The 40year JGB yield fell 3 basis points to 0.780.

The Japanese bond market had its worst month in almost a year in February, with the Nomura bond index producing a total return of minus 0.83, the biggest drawdown since March last year.

The poor performance stemmed from increasing worries that world central banks may eventually need to tighten their policies as the global economy recovers from the COVID19 pandemic.

Investors are also nervous about the BOJs upcoming policy review later this month, where the bank is widely expected to signal its willingness to allow the yield curve to steepen further.

The BOJ has so far not reacted to last months surge in JGB yields.

The central bank on Friday maintained its overall guidance on the size of its bondbuying plan for March.

On Monday, the BOJ bought 370 billion yen of three to fiveyear JGBs, the same amount as from the previous operation.

The twoyear JGB…

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