Japan's 30-Year Bond Yield Falls to Record as Confidence Worsens

Japanese bonds advanced, pushing yields on 30-year securities to a record low, as business sentiment deteriorated to the worst in almost three years.

Government securities also rallied as Japanese stocks declined, boosting demand for the safest assets. Investors offered to sell more of their short-maturity bonds at a Bank of Japan purchase operation on Friday.

“Investors have no choice but to buy bonds when stocks fall,” given the BOJ buys debt from the secondary market, said Jun Fukashiro, senior fund manager in Tokyo at Sumitomo Mitsui Asset Management.

The 30-year bond yield dropped one basis point to 0.42 percent as of 4:58 p.m. in Tokyo after earlier falling to as low as 0.4 percent, according to Japan Bond Trading Co. The benchmark 10-year yield fell 1.5 basis points to minus 0.065 percent.

The Tankan index of confidence among large manufacturers slid to 6 in March, from 12 three months ago, the central bank said. A positive number means there are more optimists than pessimists among manufacturers. Economists had forecast 8 in a Bloomberg survey.

The bid-to-cover ratio at the BOJ’s purchase of debt with maturities of one year or less was 6.62, up from 4.14 at the March 22 purchase operation for identical maturities. The Topix index of Japanese shares slid 3.4 percent.

Yields on Japanese government bonds with maturities of as long as 10 years are currently below zero.

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