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JGB Yields Track Global Peers' Slump, 10Y Yield Hits 6-M Low

TOKYO, July 8 (Reuters) - Japanese government bond yields edged down on Thursday, with the 10-year yield dipping to a six-month low, after a plunge in U.S. yields and as Japan looks set to declare its fourth state of emergency on COVID-19 infections.

The 10-year JGB yield fell to as low as 0.020%, its lowest since early January and last stood at 0.025%, down 0.5 basis point on the day.

The 20-year JGB yield fell 0.5 basis point to 0.405% while the 30-year yield fell 1.5 basis points to 0.655%.

The moves largely reflected sharp gains in global bond prices. Receding worries about inflation, reduced bets on an early tapering by the Federal Reserve and a flood of cash banks have to work with after large fiscal stimulus are all thought to be contributing to the rally.

The market was also propped up by investors’ risk aversion as Japan prepared to declare a state of emergency for Tokyo that will run through its hosting of the event to curb a new wave of coronavirus infections.

The results of 2.5 trillion yen ($22.68 billion) five-year JGB auction on Thursday drew tepid demand, but that did not change the overall mood.

The five-year yield fell 1 basis point to minus 0.125%, while the two-year JGB yield fell 0.5 basis point to minus 0.120%.

Benchmark 10-year JGB futures rose 0.14 point to 152.34, with a trading volume of 33,430 lots.

$1 = 110.25 yen Reporting by Tokyo Markets Team

Source: Reuters

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