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Japan Bonds Slide 3rd Day as Stock Gains, U.S. Rates Trim Demand

Japanese government bonds fell, pushing five-year rates to an almost two-year high, as an advance in shares and U.S. bond yields sapped demand for debt with yields still among the lowest in the world.

Ten-year yields extended the biggest two-day surge in nearly a decade, while futures on the securities sank to a one-year low. Volatility in JGBs has soared since the Bank of Japan said on April 4 it would double bond purchases in an effort to end deflation. Benchmark U.S. Treasury yields reached a seven-week high yesterday while Japan’s Topix Index of shares held near the most in 4 1/2 years. The Ministry of Finance sold 30-year debt today and will auction 5-year notes this week.