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Japan’s Yield Falls to 10-Year Low on Speculation Kuroda to Ease

March 21 (Bloomberg) -- Japan’s government bonds rose, pushing benchmark 10-year yields to the lowest since June 2003, on speculation Bank of Japan Governor Haruhiko Kuroda will signal his intention to expand monetary easing.

Bond futures touched their highest level on record after the Nikkei newspaper reported that Kuroda will announce a policy shift at his first press conference, without citing anyone. Kuroda, who officially started yesterday, has pledged more-aggressive monetary stimulus to spur growth and end entrenched deflation in the world’s third-biggest economy.

“There’re few selling catalysts for bonds because of expectations Kuroda will announce bold monetary easing in both quantity and quality,” said Daisuke Uno, Tokyo-based chief strategist at the unit of Sumitomo Mitsui Banking Corp., a unit of Japan’s second-largest bank by market value.

The yield on the benchmark 10-year note fell 1 1/2 basis points to 0.58 percent at 4:49 p.m. in Tokyo from March 19, according to Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price of the 0.6 percent security maturing in March 2023 advanced 0.141 yen to 100.188.

Yields reached 0.585 percent on March 5, the least since June 2003 when the all-time low of 0.43 percent was set.

Thirty-year rates declined 4 1/2 basis points to 1.675 percent, while 20-year yields fell 3 1/2 basis points to 1.52 percent. Five-year rates were little changed at 0.12 percent.

Ten-year bond futures for June delivery climbed to as high as 145.60, the most on record, before trading at 145.57 from 145.40 on March 19. Japanese financial markets were closed yesterday for a national holiday.

Kuroda will hold a press conference at 6 p.m. in Tokyo, according to a BOJ statement released today. Deputy Governors Kikuo Iwata and Hiroshi Nakaso will also brief the press.

To contact the reporter on this story: Yumi Ikeda in Tokyo at yikeda4@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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