Global Market: Japanese bond yields fall to multiweek lows ahead of BOJ meeting

Japanese government bonds have benefited from safe-haven demand in recent sessions, with rising bond prices pushing yields lower.

The benchmark 10-year JGB yield declined 1 basis point to 2.88%, its lowest level since September 9. The five-year yield fell 1.5 basis points to 2.285%, its lowest since September 18, while the 30-year yield dropped 2.5 basis points to 3.895%, the lowest since August 6.

Also Read |Global Market Today: Asian stocks mixed as oil rally, AI concerns weigh on sentiment

Japanese government bonds have benefited from safe-haven demand in recent sessions, with rising bond prices pushing yields lower. Investors have been monitoring developments in the Middle East, fiscal concerns and protests in France, and volatility in global equity markets amid corporate earnings announcements and developments in artificial intelligence.

Other cash bond maturities had not traded as of 0349 GMT, the report stated.

The BOJ is widely expected to keep interest rates unchanged at its policy meeting next Friday. However, markets are pricing in a roughly 60% probability of a 25-basis-point rate hike by the end of the subsequent meeting in December, as per the report.

Also Read |US stocks today: Nasdaq leads Wall Street higher as SpaceX, Super Micro lift AI sentiment

Uncertainty surrounding geopolitical developments has also supported demand for government bonds. Reports of a Houthi drone attack on a Saudi oil field that caused multiple casualties have heightened concerns about a potential escalation of the Middle East conflict, Reuters reported, citing Mizuho Securities analyst Yuki Matsuda.

With the BOJ meeting approaching, expectations for an immediate change in monetary policy remain relatively stable, while investors continue to assess the implications of geopolitical risks and inflation for the outlook on Japanese interest rates.