Japan's 20-Year Bond Yields Slide to Record Amid Yen Strength

What Can Stop the Yen's Rise?

The yield on 20-year Japanese government bonds slid to a record as the yen’s surge to an 18-month high drove a slump in the nation’s equities.

The debt rallied Monday as the Bank of Japan bought 240 billion yen ($2.3 billion) of bonds that have maturities between 10 and 25 years, and 160 billion yen of securities due in more than 25 years.

“The bond market is bullish,” said Hiroki Tsuji, a market analyst at Mizuho Securities Co. in Tokyo. “The super-long sector is getting support not just from the BOJ’s purchase operations, but from an environment of a strong yen and weak stocks.”

The 20-year yield declined 5 1/2 basis points to a record 0.235 percent as of 3:01 p.m. in Tokyo from Thursday. The 30-year bond yield sank five basis points to 0.285 percent, after reaching an unprecedented 0.265 percent on April 21. Yields on benchmark 10-year notes dropped as much as 3 1/2 basis points to minus 0.12 percent, 1 1/2 basis points above their all-time low.

Japanese markets were closed on Friday for a national holiday, and will be shut for holidays on Tuesday, Wednesday and Thursday this week.

The yen rallied to as strong as 106.14 per dollar Monday, a level unseen since October 2014. The Topix index of stocks tumbled 3 percent, falling for a fifth straight session.

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