Japanese government bond yields fell across the curve on Friday as AI-related
equity selling boosted safe-haven demand and US Treasury gains spilled into
JGBs. The 10-year JGB yield slid about 9 bps to 2.79%; the 20-year fell 5.5 bps.
The move came despite a key Japanese inflation gauge rising above the Bank of
Japan’s 2% target this year for the first time, a data point that had supported
market bets on a December BOJ rate hike. Market participants said focus shifted
to growth risk and AI-driven volatility, temporarily reducing the market’s
emphasis on inflation; long-duration bonds attracted demand for diversification
and carry.
