TOKYO: The yield on Japan’s 10-year government bond fell on Thursday, tracking US Treasury yields, which fell on renewed fears of a global banking crisis driven by problems at Swiss bank Credit Suisse.

The 10-year JGB yield fell as much as 5 basis points (bps) to 0.270% in early trade. It last traded down 3 bps to 0.290%, well below the top end of the Bank of Japan’s policy ceiling.

“With the US interest rates falling this low, it might take time for Japanese government bond (JGB) yields to go back to the previous level,” said Hiroshi Namioka, chief strategist and fund manager at T&D Asset Management.

Japanese yields began falling sharply after the central bank maintained its ultra-low policy last week and extended the declines as the collapse of Silicon Valley Bank drove fears of a financial crisis.

Japan banks, JGB yields plunge as traders assess SVB fallout

“But fundamentally, the market function for JGBs is depressed. So once yields on overseas bonds start rising, the discussion about the BOJ policy will be revived.”

US Treasury yields slumped overnight as concerns on the bank’s fate worsened as Credit Suisse’s largest shareholder said it could not provide further support to the bank.

The 20-year JGB yield was flat at 1.075%, after falling to as low as 1.005% before an auction for bonds with the same maturity.

The five-year yield fell 2 bps to 0.105%.

The 30-year JGB yield rose 2.5 bps to 1.300%. The two-year JGB yield was flat at -0.055%. The 40-year JGB yield was also flat at 1.500%.

Benchmark 10-year JGB futures rose to as high as 148. 0.63 yen to 148.35.