U.K. Gilts Rise as Japanese Stock Decline Spurs Safety Demand

U.K. government bonds advanced as Japanese stocks tumbled, boosting demand for the perceived safety of fixed-income assets.

Ten-year gilt yields dropped from the highest level in more than two months as Japan’s Nikkei 225 Stock Average plunged 5.2 percent. The pound was little changed as an industry report showed U.K. house prices jumped the most in 18 months in May.

The 10-year gilt yield dropped two basis points, or 0.02 percentage point, to 1.98 percent at 1:30 p.m. London time after rising above 2 percent yesterday for the first time since March. The 1.75 percent security due in September 2022 rose 0.17, or 1.70 pounds per 1,000-pound ($1,514) face amount, to 98.06.

The pound was at $1.5141 after falling to $1.5009 yesterday, the least since March 14. The U.K. currency traded at 85.65 pence per euro.

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