Staff of Reuters Read for 2 minutes (Reuters) – TOKYO, July 8 (Reuters) – After a drop in US yields, Japanese government bond yields dipped down on Thursday, with the 10-year yield plunging to a six-month low, as Japan prepares to declare its fourth state of emergency on COVID-19 infections. The 10-year JGB yield dropped to 0.020 percent, the lowest level since early January, and was last seen at 0.025 percent, down 0.5 basis point on the day. The yield on the 20-year JGB decreased 0.5 basis points to 0.405 percent, while the yield on the 30-year JGB declined 1.5 basis points to 0.655 percent. The changes were mostly due to substantial increases in global bond prices. Reduced expectations on an early Fed tapering, as well as a rush of cash that banks have to work with as a result of significant fiscal stimulus, are all seen to be contributing to the rally. Investors’ risk aversion boosted the market as Japan prepared to declare a state of emergency for Tokyo, which will last until the end of the event, in order to combat a new wave of coronavirus illnesses. The results of Thursday’s 2.5 trillion yen ($22.68 billion) five-year JGB auction garnered lukewarm demand, but the atmosphere remained unchanged. The yield on the five-year JGB declined 1 basis point to minus 0.125 percent, while the yield on the two-year JGB decreased 0.5 basis point to minus 0.120 percent. With a trading volume of 33,430 lots, benchmark 10-year JGB futures increased 0.14 point to 152.34. 1 dollar Equals 110.25 yen Tokyo Markets Team contributed to this report./n
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