Japan’s 10-year yields hit over 2-week low on recession concerns

JAPAN'S 10-year bond yields fell on Friday (Jul 22) to their lowest in more than 2 weeks, as concerns grew about a global recession after the European Central Bank raised interest rates by more than expected.

The 10-year Japanese Government Bond (JGB) yield fell 1.5 basis points to 0.220 per cent, its lowest since Jul 5.

The 20-year JGB yield fell 3 basis points to 0.870 per cent, its lowest since July 4.

The ECB raised its benchmark deposit rate by 50 basis points to zero percent, breaking its own guidance for a 25-basis-point move and marking its first rate hike in 11 years.

"The main theme in markets is dominated by inflation and recession and central banks are to choose which one to tackle first," said Noriatsu Tanji, chief bond strategist at Mizuho Securities.

"The economy in Europe is weaker than that in the US So, the rate hike has spurred more concerns about recession."

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The 30-year JGB yield fell 2 basis points to 1.235 per cent and the 40-year JGB yield fell 1.5 basis points to 1.430 per cent.

The 2-year JGB yield was flat at -0.080 per cent.

The 5-year yield fell 1 basis point to 0.005 per cent.

Benchmark 10-year JGB futures rose 0.37 point to 149.72, with a trading volume of 16,628 lots. REUTERS