BLBG:Treasury 10-Year Yields Touch 2012 High as Stocks Gain
Treasury (YCGT0025) 10-year yields climbed to the highest this year as Asian stocks extended a global rally amid speculation the U.S. economy is picking up, sapping demand for the relative safety of government debt.
A gauge of investor expectations for inflation climbed to a seven-month high before U.S. data today that may show import prices rose the most in three months. Japan’s bonds slid after Federal Reserve policy makers raised their assessment of the world’s largest economy, triggering a global rally of shares and diminishing the allure of lower-yielding, safer assets.
“I expect the U.S. recovery to gain momentum,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s second-largest listed bank. “Treasuries with a longer maturity are more likely to be sold.”
The benchmark 10-year note yield reached 2.1599 percent, the most since Dec. 2, and was at 2.155 percent as of 2:28 p.m. in Tokyo, three basis points higher than yesterday’s close. The 2 percent security due in February 2022 fell 1/4, or $2.50 cents per $1,000 face amount, to 98 5/8, according to Bloomberg Bond Trader prices.
The 10-year breakeven rate, derived from the difference between yields on conventional and index-linked bonds, rose to as high as 2.37 percentage points, a level unseen since Aug. 2.
Thirty-year rates climbed to 3.3 percent, the most since Oct. 31. Five-year yields climbed to 1.01 percent, rising above 1 percent for the first time this year.
Japan Yields
Japan’s benchmark 10-year note yield gained 3 1/2 basis points to 1.005 percent in Tokyo, matching the highest since Dec. 12, according to Japan Bond Trading Co., the nation’s largest interdealer debt broker.
The MSCI All-Country World Index (MXWD) of shares in 45 developed and emerging markets climbed 1.5 percent yesterday, the highest close since Aug. 1. The MSCI Asia Pacific Index (MXAP) advanced 1.1 percent today.
Prices of goods imported into the U.S. gained 0.6 percent in February from the previous month when they rose 0.3 percent, economist estimates compiled by Bloomberg show before government data due today. Retail sales increased 1.1 percent last month, the most since September, according to Commerce Department figures released yesterday.
The U.S. labor market has “improved further; the unemployment rate has declined notably in recent months but remains elevated,” the policy-setting Federal Open Market Committee said in a statement at the conclusion of a meeting yesterday. While global financial-market strains have eased, they continue to “pose significant downside risks to the economic outlook,” it said.
The Fed bought $2.3 trillion of securities in two rounds of so-called quantitative easing from December 2008 to June 2011 to spur economic growth through lower borrowing costs.
To contact the reporter on this story: Masaki Kondo in Singapore at mkondo3@bloomberg.net.
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.
