JGB yields retreat from multi-year highs on safe-haven bets

Updates yield levels, adds comments

TOKYO, Feb 3 (Reuters) - Yields on shorter-ended Japanese government bonds retreated from multi-year highs touched in early trade on Monday, as investors bought safe-haven assets after local stocks tumbled on U.S. tariff concerns.

The 10-year JGB yield JP10YTN=JBTC was last flat at 1.24% after rising to 1.26%, its highest since April 2011, earlier in the session.

"The yields rose (initially) as the market took the Bank of Japan's summary of opinions at their (January) policy meeting hawkish," said Shinichiro Kadota, head of Japan FX and rates strategy at Barclays Securities Japan.

"Investors bought back JGBs as Japanese equities fell in reaction to U.S. President Donald Trump's introduction of tariffs."

Trump levied 25% tariffs on imports from Canada and Mexico and 10% on goods from China starting on Tuesday. Canada and Mexico ordered retaliatory measures, while China said it would challenge tariffs at the World Trade Organization and take unspecified countermeasures.

The two-year JGB yield JP2YTN=JBTC was down 0.5 basis point at 0.725% after rising earlier to 0.735%, a level last seen in October 2008.

The five-year yield JP5YTN=JBTC was down 1 bp at 0.895% after rising earlier to 0.915%, its highest since November 2008.

Japan's Nikkei fell more than 2% and the dollar surged, pushing its Canadian counterpart and Mexican peso to multi-year lows. .N225FRX/

The summary of the BOJ's January policy meeting showed that central bank policymakers discussed the likelihood of raising interest rates further with some warning of upside inflation risks and the damage a weak yen could inflict on the economy.

Barclays expects the BOJ to raise its policy rate one more time this year in July to 0.75%, Kadota said.

"With that consensus in place, the yields will move more from overseas factors going forward," he said.

Yields on longer-dated bonds rose, with the 20-year JGB yield JP20YTN=JBTC rising 1.5 bps to 1.955%.

The 30-year JGB yield JP30YTN=JBTC rose 1.5 bps to 2.3% and the 40-year JGB yield JP40YTN=JBTC rose 1.5 bps to 2.67%.