Aug. 16 (Bloomberg) -- Japanese five-year notes gained, pushing yields to the lowest since March, as a rout in global stocks increased demand for government debt.

The notes rose for a second day on speculation widening losses linked to home loans for people with poor credit will slow economic growth in the U.S., Japan's biggest export market. U.S. stocks tumbled and Treasuries gained yesterday on speculation Countrywide Financial Corp., the nation's biggest mortgage lender, may be forced into bankruptcy. The Nikkei 225 Stock Average fell to the lowest since November today.

``The global flight-to-quality move isn't over yet,'' said Satoshi Kon, who helps manage the equivalent of $19.7 billion in Japanese bonds at Pension Fund Association in Tokyo, which has more than 1,600 corporate pension funds as members. ``Slumping stocks are bond supportive.''

The yield on the 1.4 percent note due June 2012 fell 3 basis points to 1.165 percent at 12:47 p.m. in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. It was the lowest for benchmark five-year debt since March 23. The note's price rose 0.138 yen to 101.071 yen. A basis point is 0.01 percentage point.

Ten-year bond futures for September delivery rose 0.33 to 135.33 as the Nikkei 225 tumbled 3.5 percent.

To contact the reporter on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net.

Last Updated: August 16, 2007 00:07 EDT