TOKYO: Japanese government bonds began the week on a firmer footing on Monday, as a continued drop in stock prices supported demand for bonds.
With US and UK markets both closed for holidays on Monday and the benchmark yield well off a 13-month high touched last week, the JGB market was relatively calm on Monday, in contrast to volatile sessions in recent weeks.
JGB trading has been turbulent since the Bank of Japan unveiled its radical monetary policy overhaul on April 4.
The minutes of the BOJ's April 26 meeting released on Monday showed a rift developing within the board over its stimulus plan, as a few policymakers opposed targeting 2 percent inflation in two years and called for more flexibility in guiding monetary policy.
"We're still seeing potential instability in the bond market," one member was quoted as saying.
On Monday, though, the Nikkei share average skidded more than 2 percent, moving away from 5-1/2-year high hit last week. The yen strengthened, with the dollar falling about 0.3 percent from Friday to 100.94 yen.
"Stocks are down, the yen is up, and JGB yields can naturally be expected to come down. There is a feeling that stocks have corrected to these lows, and this has brought some stability," said a fixed-income fund manager at a Japanese trust bank in Tokyo.
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