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Good times back in Japanese government bonds

As global uncertainty unfolds, Japanese bonds investors are enjoying good times. 10 year Japanese bonds are having their biggest weekly rally in at least six years.

  • Bond prices climbed for the sixth consecutive day and yields on 10 year have dropped to 0.423% as of now.
  • This year since January yields on bonds have been rising. 10 year yields rose from 0.201% in January 19th to 0.536% by June 11th. However tide seems to have turned since then.
  • This week alone 10 year yield has dropped by 9.3 basis points, which stands as the largest weekly drop since November 2009.

Similarly US treasuries and German bunds have also gained amid risk aversion, however lower volatilities associated and bank of japan buying ¥ 80 trillion of Government bonds and other assets per annum make Japanese bonds extra sweet and Yen a better funding currency.

Yen is expected to remain sell against Dollar, pound and Euro, while Japanese bonds remain a buy, compared to American and European counterparts.

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