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JGB yields track US peers to April highs as trade tensions ease
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JGB yields track US peers to April highs as trade tensions ease
May 26, 2025 6:26 AM

TOKYO, May 13 (Reuters) - Japanese government bond

yields rose on Tuesday to their highest since U.S. President

Donald Trump's April 2 "Liberation Day," when he announced a

flurry of tariffs on U.S. trading partners.

U.S. Treasury yields rose on Monday after weekend talks

between U.S. and Chinese negotiators yielded a 90-day pause in

their tit-for-tat trade spat and sharply lowered the tariffs the

world's top two economies had imposed on each other.

Bank of Japan deputy governor Shinichi Uchida told

parliament on Tuesday that the central bank expects wages and

prices to keep rising, even as the uncertainty over U.S. tariff

policy weighs on the economy, keeping policymakers on course to

continue raising interest rates.

The 10-year JGB yield rose as much as 8 basis

points (bps) to 1.465%, while the five-year yield

advanced 9 bps to 1%, both highs since April 2.

Benchmark 10-year JGB futures fell as much as 0.96

yen to 139.08 yen, the lowest since April 2. Bond yields move

inversely to prices.

The two-year yield rose 6.5 bps to 0.72%, the

highest since April 3.

However, Mizuho Securities analysts said they doubt JGB

yields will stay at the current highs.

"The outcome of these discussions remains uncertain," said

Noriatsu Tanji, Mizuho's chief bond strategist, referring to the

U.S.-China trade truce.

"The recent rebound in the market, including in risk asset

prices, may be seen as somewhat excessive, occurring in low

liquidity conditions" that exacerbate price swings, he said.

Superlong JGB yields initially rose, before later reversing

direction.

The 30-year yield added 1 bp to reach a new

record high of 2.96%, but then sank 5 bps to 2.9%.

An auction of 30-year bonds saw weak demand, but such a

result had been widely expected, producing a limited reaction in

the market, analysts said.

The 20-year JGB yield rose as much as 1.5 bps

early in the session, but then declined in sympathy with the

30-year bond, and was last down 2.5 bps at 2.36%.

(Reporting by Kevin Buckland; Editing by Varun H K)

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