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JGBs rebound as global bond sell-off eases

·2 min read

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

The 10-year JGB yield fell 1 basis point to 0.150%, slipping off Friday's 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 20-year yield falling 2.5 basis points to 0.530% and the 30-year yield shedding 3 basis points to 0.725%.

The 40-year 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 COVID-19 pandemic.

Investors are also nervous about the BOJ's 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 month's surge in JGB yields.

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

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

The two-year JGB yield fell 0.5 basis point to minus 0.120%.

The five-year yield fell 1 basis point to minus 0.065%.

Benchmark 10-year JGB futures rose 0.19 point to 150.81, with a trading volume of 35,015 lots. (Reporting by Tokyo Markets Team; Editing by Ramakrishnan M.)