* US, UK , euro zone yields soar in global bond sell off
* Bond markets express disappointment in ECB action on
* BOJ said to be seeking steeper yield curve
By Dhara Ranasinghe
LONDON, Sept 9 Germany's 10-year Bund yield
turned positive on Friday for the first time since the day after
Britain's Brexit vote in June as a sell-off in global bonds took
Disappointment at the European Central Bank's failure to
deliver more stimulus at a meeting on Thursday weighed on euro
zone bond markets from the outset.
That selling gathered pace as focus turned to the
difficulties facing central banks globally. Traders pointed to a
Deutsche Bank note that said weak growth, higher inflation and
stagnant productivity would shake bond investors for years.
The Bank of Japan, meanwhile, is studying several options to
steepen the bond yield curve, sources familiar with its thinking
said, as authorities desperately seek policy tools to revive an
economy that has failed to emerge from stagnation despite years
of massive stimulus.
Germany's 10-year Bund yield rose to 0.02 percent
, up more than 8 basis points on the day and the
first time it has climbed above zero since the results of the
June 23 Brexit vote sent shock waves through markets globally.
Thirty-year German yields soared more than 11 bps to 0.62
percent, and were on track for their biggest
one-day rise in two months.
"We had the disappointment that the ECB is not gearing up
for additional stimulus," said Richard McGuire, head of rates
strategy at Rabobank.
"But the sell-off has gone beyond that today with talk about
the BOJ wanting a steeper yield curve, so there is the threat of
a sea-change in how central banks operate."
U.S. Treasury yields rose to their highest levels in more
than two months, while British 10-year gilt yields
soared 10 bps.
The European Central Bank left monetary policy unchanged and
said an extension of the central bank's 1.7 trillion euro
bond-buying programme had not been discussed.
It is also considering changing the amount of bonds it buys
under its asset-purchase programme, its country composition and
the mininum yield, rate setter Ilmars Rimsevics said on Friday,
adding a decision could be made in December.
That followed comments by ECB chief Mario Draghi on Thursday
that the ECB had asked internal committees to look at various
options to ensure the smooth running of asset buys. He had used
similar language at the October 2015 meeting, which was followed
by an easing package six weeks later.
Analysts said the indication that tweaks in the bond-buying
programme were on the way helped explain the sell-off in Germany
- where the bulk of purchases for the quantitative easing
programme are made.
"The fact that the ECB didn't extend QE yesterday suggests
some reluctance to shift the goal posts," said Martin van Vliet,
senior rates strategist at ING.
"There's also an acknowledgement about the issue of scarcity
and any technical changes in December to the scheme could ease
pressure on German Bunds, which helps explain the selling
The sell-off took German seven-year yields back above minus
0.40 percent, making them eligible for the bond
Under the programme, the ECB does not buy bonds with a yield
below the deposit rate of minus 0.40 percent.
Across the euro zone, 10-year bond yields were 6-9 bps
higher on the day.
Among peripheral debt, lower-rated Italian and Spanish
10-year bond yields were 9 basis points higher on the day, with
both on track for their biggest daily rise since the Brexit
results. Portuguese yields rose a similar amount to 3.17 percent
- their highest in almost two months.
For Reuters new Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Reporting by Dhara Ranasinghe; Editing by Nigel Stephenson and