Japanese bonds gain on profit-taking

In Japan, 10-year government bonds gained 5 basis points on Thursday to reach a yield of 1.290 percent. The rise in yields came as a result of profit-taking and on Japanese machinery orders that were better than they had been expected to be.

The increase in orders was taken to be a sign that the economy in Japan was continuing its recovery. Opinions are split on whether yields on Japanese government bonds will continue their climb.

Yields on government bonds in the eurozone were down. The 10-year Bund lost 2.8 basis points to 3.995 percent. Interest in auctions of new issues in Europe have been mixed, but interest in Thursday’s auction of €844 million in Spanish 30-year bonds was good.

In the UK, figures showing that growth in retail sales had fallen to its lowest point in six years didn’t seem to have much effect on trading as the 10-year gilt yielded 4.395 percent.

US Treasury bonds lost 1.3 basis points by mid-day in New York, to yield 4.098 percent. The decline in yields came after news that the Philadelphia Federal Reserve’s index of activity within its district has fallen to -2.2 in June. This figure was well under the 7.3 in reached in May and even further below the expected level of 10.0 for June.

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