By Kevin Buckland
TOKYO, March 2 (Reuters) - Yields on the longest
Japanese government bonds rose on Thursday from multi-month lows
amid pressure from elevated U.S. yields and as month-end buying
by pension funds dried up.
The 20-year JGB yield was up 2.5 basis points
to 1.205%, as of 0530 GMT, after dropping as low as 1.14% in the
previous session for the first time since mid-December.
The 30-year yield also rose 2.5 basis points
to reach 1.380%, rebounding from as low as 1.335% on Wednesday,
a level last seen in early October.
Benchmark 10-year JGB futures fell 2 yen to 146.67.
The cash note had yet to trade, and last yielded 0.5%, the upper
limit under the Bank of Japan's yield curve controls.
Traders said an auction of 10-year notes went smoothly.
U.S. Treasury yields had also climbed in Tokyo hours, with
the 10-year rising to the highest since Nov. 10 at
4.028%.
U.S. economic data has continued to run hot despite an
aggressive rate-hiking campaign, and commentary from Fed
officials has remained hawkish, with Minneapolis Fed President
Neel Kashkari overnight saying he would raise his forecast for
the path of interest rates at this month's policy meeting.
"The Fed has kind of confirmed they will raise the terminal
rate," above what they've signaled so far, lifting U.S. yields,
said Naka Matsuzawa, chief strategist at Nomura Securities in
Tokyo.
"The superlong sector in JGBs has been rallying like crazy
for the last several days against a backdrop of higher U.S.
yields, so (today's action) is not just a reaction to higher
U.S. yields," he added. "The flattening of the curve has gone
too far for supply-demand factors."
The two-year JGB yield fell 0.5 basis point to
-0.040%, while the five-year yield was flat at
0.200%.
(Reporting by Kevin Buckland)
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