The yields on Japan’s ultra-long-term government bonds followed the trend of U.S. Treasury yields on Friday, reaching multi-month highs, but subsequently retreated due to safe-haven demand and local investors absorbing them at lower levels.
Naomi Muguruma, Senior Market Analyst at Morgan Stanley, stated that concerns about the global economy and the decline in the Japanese stock market have led investors to buy bonds as safe-haven assets.
“We all know that the U.S. economy seems resilient, but that’s only the U.S., and other parts of the world look unstable,” Muguruma said.
Yesterday’s auction of 20-year Japanese government bonds showed a lackluster performance, with bond yields ticking up.
Muguruma noted that domestic investors are waiting for opportunities to buy at lower levels, which presents them with a chance to do so.
