JGB yields pare rise on report Japan to consider buying back bonds
TOKYO - Japanese government bond yields pared earlier advances on Monday following a report that the Ministry of Finance is considering buying back some super-long bonds it issued at low interest rates.
Such a move would come on top of an expected government plan to trim issuance of the longest-dated debt in the wake of sharp rises in yields last month, Reuters reported citing two sources with direct knowledge of the plan.
The 10-year JGB yield ended the day flat at 1.455% and briefly dipped to 1.450% following the report. It had earlier risen as high as 1.475%.
JGB yields were initially pulled higher by an advance for U.S. Treasury yields after resilient labour market data on Friday saw traders pare back bets for a near-term Federal Reserve interest rate cut.
Traders now see 63% odds of a Fed cut by September, down from 74% before the monthly payrolls report.
The 30-year JGB yield was 1.5 bps higher at 2.89%, but down from as high as 2.92% earlier on Monday.
The five-year yield ended 1 bp higher at 1.02%, paring a 2 bps advance.
The 20-year and two-year hadn't changed hands following the Reuters report, and remained 3 bps higher at 2.36% and 1.5 bps higher at 0.775%, respectively.
Super-long JGB yields pushed to a quarter-century high of 2.600% for 20-year JGBs and a record 3.185% for 30-year JGBs last month, as investors shied away from the longest-dated securities amid growing angst about developed-nation deficits, including in Japan. The rise was later exacerbated by poor results at super-long JGB auctions. However, the finance ministry's pledge to examine reduced issuance of super-long debt marked a turning point for the JGB market.
Now, in the event of a poor JGB auction, investors still buy the bonds in the belief that the finance ministry will pare issuance even more, said Yunosuke Ikeda, chief macro strategist at Nomura.
"A kind of built-in stabilization system is at work," Ikeda said. "In that sense, we can say The worst period is over."
(Reporting by Kevin Buckland; Editing by Sharon Singleton)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gulf Today
2 hours ago
- Gulf Today
Gold gains on weaker dollar as US-China talks in focus
Gold prices rose on Monday, supported by a weaker US dollar ahead of U.S.-China trade talks aimed at resolving tensions, while platinum extended gains for a sixth straight session to scale a four-year peak. Spot gold rose 0.3 per cent to $3,318.76 an ounce, as of 1007 GMT, after dropping earlier in the session to $3,293.29, its lowest level since June 2. US gold futures fell 0.2 per cent to $3,339.70. The dollar fell 0.3 per cent against a basket of peers, making bullion cheaper for holders of other currencies. Investors recognise that drivers of gold, including trade and geopolitical tensions, debt concerns and weak economic growth, remain in place and should continue to support the metal in the months ahead, said Giovanni Staunovo, an analyst at UBS. US and Chinese officials will sit down in London on Monday for talks aimed at defusing the trade dispute between the two superpowers. Stronger-than-expected US non-farm payrolls data have led investors to scale back expectations for Federal Reserve rate cuts this year from two to one in October. Market attention will turn to US CPI data, due on Wednesday, for further clues on the Fed's monetary policy path. Gold, considered a safe-haven asset during political and economic uncertainty, tends to thrive in a low-rate environment. Meanwhile, China's central bank added gold to its reserves in May for the seventh straight month, official data showed. Reuters
Al Etihad
2 hours ago
- Al Etihad
London stocks pull back as investors turn cautious ahead of US-China talks
9 June 2025 16:40 LONDON (REUTERS) London's benchmark index slipped on Monday after rounding off four weeks of gains, as caution prevailed ahead of much-awaited US-China talks later in the FTSE 100 was down 0.3%, while the mid-cap FTSE 250 was up 0.4%.Top officials from the US and China are scheduled to meet in London for talks that investors hope will indicate some progress in de-escalating trade tensions between the world's two biggest talks follow a phone call between the presidents of the two countries last week, in which they agreed to hold more talks amid a global trade war that has escalated from tit-for-tat tariffs to export finance minister Rachel Reeves will hold a meeting with Chinese vice premier, He Lifeng, without providing any details on the sectors were lower, with aerospace and defence stocks leading losses. They were down 0.9%, extending declines to a third session. Pharma stocks dipped 0.8%, as investors looked to book some stocks rounded off the previous week with gains, after a US jobs report allayed concerns of an economic slowdown in the world's biggest economy, despite a US tariff roller stocks, WPP slipped about 2% to bottom the FTSE 100. The ad group said its chief executive officer, Mark Read, would retire by the end of soared 70% to top the FTSE 250 after the scientific instruments maker said it has received a takeover proposal from private equity firm Advent, valuing its shares at 37.35 pounds per jumped 24% after US chipmaker Qualcomm agreed to acquire to semiconductor company for about $2.4 billion. M&G Investments gained 1.7% as UBS upgraded the stock to 'buy' from 'neutral'.
Gulf Today
2 hours ago
- Gulf Today
China's export growth slows last month as tariffs take toll
China's export growth slowed to a three-month low in May as US tariffs slammed shipments, while factory-gate deflation deepened to its worst level in two years, heaping pressure on the world's second-largest economy on both the domestic and external fronts. US President Donald Trump's global trade war and the swings in Sino-US trade ties have in the past two months sent Chinese exporters, along with their business partners across the Pacific, on a roller coaster ride and hobbled world growth. Underscoring the US tariff impact on shipments, customs data showed that China's exports to the US plunged 34.5 per cent year-on-year in May in value terms, the sharpest drop since February 2020, when the outbreak of the COVID-19 pandemic upended global trade. Total exports from the Asian economic giant expanded 4.8 per cent year-on-year in value terms last month, slowing from the 8.1 per cent jump in April and missing the 5.0 per cent growth expected in a Reuters poll, customs data showed on Monday, despite a lowering of US tariffs on Chinese goods which had taken effect in early April. 'It's likely that the May data continued to be weighed down by the peak tariff period,' said Lynn Song, chief economist for Greater China at ING. Song said there was still front-loading of shipments due to the tariff risks, while acceleration of sales to regions other than the United States helped to underpin China's exports. Imports dropped 3.4 per cent year-on-year, deepening from the 0.2 per cent decline in April and worse than the 0.9 per cent downturn expected in the Reuters poll. Exports had surged 12.4 per cent year-on-year and 8.1 per cent in March and April, respectively, as factories rushed shipments to the US and other overseas manufacturers to avoid Trump's hefty levies on China and the rest of the world. While exporters in China found some respite in May as Beijing and Washington agreed to suspend most of their levies for 90 days, tensions between the world's two largest economies remain high and negotiations are underway over issues ranging from China's rare earths controls to Taiwan. Trade representatives from China and the US are meeting in London on Monday to resume talks after a phone call between their top leaders on Thursday. China's imports from the US also lost further ground, dropping 18.1 per cent from a 13.8 per cent slide in April. Zichun Huang, economist at Capital Economics, expects the slowdown in exports growth to 'partially reverse this month, as it reflects the drop in US orders before the trade truce,' but cautions that shipments will be knocked again by year-end due to elevated tariff levels. China's exports of rare earths jumped sharply in May despite export restrictions on certain types of rare earth products causing plant closures across the global auto supply chain. The latest figures do not distinguish between the 17 rare earth elements and related products, some of which are not subject to restrictions. A clearer picture of the impact of the curbs on exports will only be available when more detailed data is released on June 20. China's May trade surplus came in at $103.22 billion, up from the $96.18 billion the previous month. Other data, also released on Monday, showed China's imports of crude oil, coal, and iron ore dropped last month, underlining the fragility of domestic demand at a time of rising external headwinds. Beijing in May rolled out a series of monetary stimulus measures, including cuts to benchmark lending rates and a 500 billion yuan low-cost loan programme, aimed at cushioning the trade war's blow to the economy. China's markets showed muted reaction to the data. The blue-chip CSI300 Index climbed 0.29 per cent and the benchmark Shanghai Composite Index was up 0.43 per cent. Producer and consumer price data, released by the National Bureau of Statistics on the same day, showed that deflationary pressures worsened last month. The producer price index fell 3.3 per cent in May from a year earlier, after a 2.7 per cent decline in April and marked the deepest contraction in 22 months. Cooling factory activity also highlights the impact of US tariffs on the world's largest manufacturing hub, dampening faster services growth as suspense lingers over the outcome of US-China trade talks. Retail sales growth slowed last month as spending continued to lag due to job insecurity and stagnant new home prices. These headwinds were evident in China's car sales for May, which grew 13.9 per cent year-on-year, slowing from a 14.8 per cent increase the previous month, data from the China Passenger Car Association showed. Sluggish domestic demand and weak prices have weighed on China's economy, which has struggled to mount a robust post-pandemic recovery amid a prolonged property slump and has relied on exports to underpin growth. Reuters
