Australian and Japanese government bonds dropped, sending benchmark yields in both countries to the highest this year, on signs of economic improvement.
The government securities sold off amid a global fixed-income slump after investors balked at record-low yields set earlier this year from Asia to Europe.
Australian labor-force data reported Thursday in Sydney was stronger than strategists forecast. That came after U.S. job growth beat expectations last week, underpinning projections the Federal Reserve will raise interest rates in the world’s biggest economy.
“Government yields went down too far,” said Hideaki Kuriki, an investor at Sumitomo Mitsui Trust Asset Management in Tokyo. “The Japanese and Australian economies are OK, though not as strong as they could be.”
The Australian 10-year yield climbed as much as 11 basis points to 3.16 percent, the highest level since November. It has snapped back from the record low of 2.25 percent set in February and was 3.15 percent as of 3:10 p.m. in Sydney.
Bonds fell after a government report showed the nation’s unemployment rate unexpectedly dropped to a one-year low in May. The yield has climbed more than 80 basis points since March, heading for its steepest quarterly increase since 2009.
Japan’s 2025 benchmark yield climbed as much as three basis points to 0.545 percent, a level not seen since September. The all-time low was 0.195 percent in January. Japanese machinery orders unexpectedly rose in April, data released Wednesday show.
U.S. Treasuries were little changed with the 10-year yield at 2.47 percent, after it touched an eight-month high of 2.49 percent on Wednesday. The Bloomberg Global Developed Sovereign Bond Index has fallen almost 4 percent this year, after eking out a 0.1 percent gain in 2014.
bloomberg.com
The government securities sold off amid a global fixed-income slump after investors balked at record-low yields set earlier this year from Asia to Europe.
Australian labor-force data reported Thursday in Sydney was stronger than strategists forecast. That came after U.S. job growth beat expectations last week, underpinning projections the Federal Reserve will raise interest rates in the world’s biggest economy.
“Government yields went down too far,” said Hideaki Kuriki, an investor at Sumitomo Mitsui Trust Asset Management in Tokyo. “The Japanese and Australian economies are OK, though not as strong as they could be.”
The Australian 10-year yield climbed as much as 11 basis points to 3.16 percent, the highest level since November. It has snapped back from the record low of 2.25 percent set in February and was 3.15 percent as of 3:10 p.m. in Sydney.
Bonds fell after a government report showed the nation’s unemployment rate unexpectedly dropped to a one-year low in May. The yield has climbed more than 80 basis points since March, heading for its steepest quarterly increase since 2009.
Japan’s 2025 benchmark yield climbed as much as three basis points to 0.545 percent, a level not seen since September. The all-time low was 0.195 percent in January. Japanese machinery orders unexpectedly rose in April, data released Wednesday show.
U.S. Treasuries were little changed with the 10-year yield at 2.47 percent, after it touched an eight-month high of 2.49 percent on Wednesday. The Bloomberg Global Developed Sovereign Bond Index has fallen almost 4 percent this year, after eking out a 0.1 percent gain in 2014.
bloomberg.com
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