TOKYO: Japan’s government bond yields were flat on Monday, as a domestic equity rally offset debt appetite following a fall in US Treasury yields.

The 10-year JGB yield was flat at 0.225% and the benchmark 10-year JGB futures barely moved at 149.95, with a trading volume of 6,314 lots. Japan’s Nikkei hit a more than one-month high, tracking a Wall Street rally on Friday and Shanghai’s decision to ease COVID-19 curbs.

Japan Q2, full-year growth to be weaker than previously estimated

US Treasury yields ended near six-week lows on Friday, as concerns about growth and signs that inflation may have peaked led investors to speculate that the Federal Reserve may not raise rates as much as previously expected.

But market participants in Japan were still careful about high US inflation.

“Inflation was set aside from investors’ agenda for now but it could come back if rising commodity price and lack of labour force continue,” said Shu Yamashita, the chief economist at au Jibun Bank.

The 20-year JGB yield rose 0.5 basis point to 0.735%.

The 30-year JGBs did not traded and the yield remained at 0.985%.

The two-year and five-year JGBs did not trade either and the yields remained at minus 0.070% and minus 0.005%, respectively.

The 40-year JGBs also did not trade and the yield were flat at 1.065%.