Early Tokyo trading showed mixed Japanese government bonds as falling domestic equities supported safe-haven demand, while rising crude oil prices sustained inflation and Bank of Japan tightening concerns.
Japanese government bonds were mixed in early Tokyo trading as investors weighed support from overnight U.S. Treasury gains and a marked fall in domestic equities against rising crude oil prices. Weaker stocks may encourage shifts into JGBs, but higher energy prices could add to inflation in Japan and reinforce expectations for a faster pace of BOJ rate increases. The reported moves differed across the updates: the two-year JGB yield was up 0.5 basis point at 1.435% in the earlier report, while the later report said the five-year yield was unchanged at 1.950% and the 10-year yield fell 1 basis point to 2.700%; the earlier report had put the five-year at 1.930% and the 10-year unchanged at 2.685%.