Global Market: Japan bond yields fall as US tech selloff fuels safe-haven demand

Japanese bond yields declined as investors sought safety amid technology stock weakness and shifting fiscal concerns.

The benchmark 10-year JGB yield declined 3 basis points to 2.9%. Bond yields move inversely to prices.

US Treasury prices rose on Friday, capping a strong week as investors sought safer assets amid a selloff in artificial intelligence-linked stocks. The weakness in US technology shares raised concerns about a potential spillover into Japanese AI and semiconductor stocks, strengthening demand for government bonds.

Takaichi said on Monday that Japan would appropriately control the size of its debt issuance, a statement that helped support sentiment in the bond market amid concerns over the country's fiscal outlook.

According to Reuters, the 20-year JGB yield fell 1.5 basis points to 3.790%, while the two-year yield, which is particularly sensitive to expectations for Bank of Japan (BOJ) policy rates, dropped 1.5 basis points to 1.890%. The five-year yield was unchanged, while the 30-year yield held steady. The 40-year JGB yield had yet to trade.

Monetary policy expectations also remained in focus after the BOJ raised interest rates in September and signalled a greater emphasis on tackling inflation.

BOJ Governor Kazuo Ueda said on Monday that underlying inflation was quite close to the central bank's 2% target, reinforcing expectations that policymakers would continue to assess price trends when determining the future path of interest rates.

The movement in Japanese bond yields reflects a balance between global risk aversion, which tends to support demand for government debt, and expectations surrounding domestic monetary policy and the government's borrowing plans.