Japan’s super-long yields fall to 2-week low on hopes of a slowdown in Fed rate hikes

By Junko Fujita

TOKYO, Nov 11 (Reuters) – Yields on super-long Japanese government bonds fell to a two-week low on Friday as a sign of slowing inflation in the United States fueled hopes that the Federal Reserve could become less aggressive with interest rate hikes.

The 20-year JGB yield fell 7.5 basis points to 1.050%, its lowest since Nov. 1, in its biggest decline since Oct. 27.

The 30-year JGB yield plunged 9 basis points to 1.425%, its lowest since Nov. 1, and was last down 7.5 basis points at 1.440%.

“Upside pressure on global yields is receding,” said Shinji Ebihara, rates strategist at Barclays Securities Japan.

“Japanese yields are also expected to fall, with those on ultra-long-maturity notes leading the declines, as bonds with those maturities sold off heavily.”

The U.S. consumer price index rose less than expected by 7.7% year on year – the first time since February that the annual rise was less than 8%, and the smallest gain since January.

The slower pace of US inflation sent the 10-year Treasury yield to its lowest level in five weeks overnight.

The 40-year JGB yield fell 10 basis points to 1.650%, its lowest since Oct. 11.

The 10-year JGB yield fell 1 basis point to 0.235%, its lowest since Oct. 28.

The two-year JGB yield fell 0.5 basis points to -0.060%.

The five-year yield fell 2 basis points to 0.045%.

The benchmark JGB 10-year futures index rose 0.35 points to 149.46, with trading volume of 18,158 lots.

(Reporting by Junko Fujita; Editing by Rashmi Aich)

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