JGB yields fall on easing fiscal concerns, hawkish BOJ board member's speech in focus

By Junko Fujita

TOKYO, Feb 13 (Reuters) - Japanese government bond yields fell on Friday as Finance Minister Sastsuki Katayama's recent remarks eased fiscal concerns, while market participants awaited comments from a hawkish Bank of Japan board member later in the day.

The benchmark 10-year JGB yield JP10YTN=JBTC fell 3 basis points (bps) to 2.200%. The two-year yield JP2YTN=JBTC slipped 1 bp to 1.29%. Yields move inversely to bond prices.

"Recent declines in yields are supported by receding worries over the nation's worsening fiscal condition. And today, investors bought JGBs as stocks fell," said Yuki Kimura, a bond strategist at Okasan Securities.

Yields are on the decline since Prime Minister Sanae Takaichi's Liberal Democratic Party won a landslide victory in Sunday's election.

Yields on super-long-dated bonds hit record highs last month after Takaichi pledged to suspend taxes on food for two years, but Katayama's latest comments have eased worries about fiscal expansion, said Kimura.

Katayama on Tuesday said using surplus from $1.4 trillion foreign currency reserves could be considered when discussing funding sources for planned cuts in the food sales tax.

The 20-year JGB yield JP20YTN=JBTC fell 1 bp to 3.050%.

BOJ board member Naoki Tamura is expected to deliver a speech at 0330 GMT.

Japan's Nikkei .225 fell more than 1% on Friday.