JGB yields rise under pressure from US Treasuries, weak 5-year note auction

By Kevin Buckland

TOKYO, May 15 (Reuters) - Japanese government bond yields climbed to fresh highs on Thursday as they tracked a rise in U.S. peers before being pressured further by weak demand at a five-year note auction.

The 10-year JGB yield JP10YTN=JBTC rose as much as 3 basis points (bps) to 1.48% for the first time since April 2, when U.S. President Donald Trump upended markets globally with his "Liberation Day" reciprocal tariffs.

Equivalent U.S. Treasury yields US10YT=RR edged up to 4.55% in Asian hours, the highest since April 11, as investors grew increasingly concerned about disagreements on the Trump administration's tax cut and budget legislation currently in Congress.

The five-year yield JP5YTN=JBTC rose by 3.5 bps to 1% for the second time this week, a level not seen since April 2.

The two-year JGB yield JP2YTN=JBTC added 1.5 bps to 0.72%, also for the second time this week. That level hadn't been seen since April 3.

Superlong bond yields continued to soar against a backdrop of persistent concerns about increased government spending ahead of upper house elections slated for July.

The 30-year JGB yield JP30YTN=JBTC rose as much as 6 bps to 2.98%, a new high in LSEG data back to April 2003.

The 20-year yield JP20YTN=JBTC advanced 5.5 bps to touch 2.41% for the first time since mid-April, when it marked a 19-year peak.

"It is highly likely that concerns about fiscal expansion and the increase in government bond issuance will remain to some extent in the market at least until around autumn," when issuance plans are likely to be revealed, following the unveiling of a supplementary budget, Mizuho analysts said.

"We should remain aware that the current uncertainty regarding fiscal policy and vague concerns about the increase in government bonds could further weigh on the market."