March 23, 2018 / 4:42 AM / a month ago

JGBs rise on flight to safety; 10-year yield hits 4-month low

March 23 (Reuters) - Japanese government bonds (JGBs) pushed higher on Friday as worries over rising global trade tensions triggered a slide in equities and sparked flight-to-safety buying of government debt.

The key June 10-year JGB futures contract rose 0.13 point to 151.03, with trading volume of 17,309 lots.

The rise in JGB futures had a spillover effect on longer-term JGBs, dragging down yields among longer tenors.

“Risk aversion is benefitting JGBs and the Japanese yen,” said Eugene Leow, a rates strategist for DBS in Singapore.

“In any case, JGBs have been and will continue to be the most stable amongst the developed economies on account of yield curve control,” Leow said, referring to the Bank of Japan’s policy of keeping 10-year government bond yields at around zero percent.

The benchmark 10-year JGB yield fell around 1 basis point to 0.020 percent, matching a low last reached on Nov. 22.

The fact that the Bank of Japan announced outright bond buying operations for medium-term JGBs and inflation-indexed JGBs, as expected, also supported market sentiment.

The 30-year JGB yield fell 1.5 basis point to 0.735 percent, matching a low last reached in mid-April of 2017. (Reporting by Tokyo markets team; Additional reporting by Masayuki Kitano in SINGAPORE; Editing by Sunil Nair)

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