JGB yields hit record low amid rising global uncertainties

The Japanese government bonds gained on Wednesday as risk-averse investors continued to seek the perceived safety of sovereign debt after recent polls suggested Britain is on course to leave the European Union. Also, investors await Fed policy decision and Fed Chair Yellen’s post-statement press conference.

The yield on the benchmark 10-year bonds, which moves inversely to its price fell to all-time low of -0.181 percent, yield on super-long 30-year bonds nearly dipped nearly 2 basis points to 0.217 percent, yield on 15-year bonds tumbled more than 1 basis point to a recod low of -0.018 percent (dip below zero for the first time on Tuesday) and the 20-year JGB yield fell to a record low of 0.145 percent by 05:45 GMT.

In the global debt market, the benchmark 10-year US Treasury note yield hit fresh 4-month low as 'Brexit' vote looms. The benchmark German 10-year bund yields fell below zero for the first time on Tuesday to -0.03 percent. The UK 10-year gilt yield hits new low of 1.14 pct, likely to test 1.10 pct mark soon.

Moreover, the JGBs have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Bank of Japan's target. Today, crude oil tumbled more than 1 percent after data showed a surprise build in U.S. crude inventories last week, adding to the market's nervousness around Britain's vote next week on whether to leave the European Union. The American Petroleum Institute (API) showed U.S. crude inventories rose by 1.2 million barrels in the week to June 10 to 536.7 million, against market consensus for a decrease of 2.3 million barrels. The International benchmark Brent futures fell 1.40 pct to $49.13 and West Texas Intermediate (WTI) dipped 1.42 pct to $47.80 by 05:30 GMT.

In addition, the Bank of Japan will hold its monetary policy meeting on 15-16 June, announcing its decision on Thursday. The BoJ's 9-member policy board is expected to leave the current monetary policy stance intact, despite remaining under pressure to initiate a rate cut at its policy meeting this week, as sagging inflation and a rising yen threaten efforts to revive the economy, but a UK vote on leaving the European Union will derail its decision.

According to a Bloomberg poll of economists, 27.5 percent predict the BoJ to ease the policy on Thursday meet, while a majority of them -- 55 percent – expect an easing to happen only during the next meet that is scheduled for July 29 (we supports the latter view).

Meanwhile, the benchmark Nikkei 225 index was trading up 0.63 percent at 15,959.09, and the broader Topix index trading higher 0.63 percent to 1,280 points by 05:55 GMT.