Japanese bonds rise as Trump pauses Iran strike plans
TOKYO, March 24 (Reuters) - Japanese government bonds (JGBs) rose on Tuesday as investors saw signs of an off-ramp in the Middle East conflict after U.S. President Donald Trump held off on striking Iran's energy infrastructure.
The benchmark 10-year JGB yield JP10YTN=JBTC fell 2.5 basis points to 2.280%, retreating from Monday's two-month high of 2.305%. Yields move inversely to bond prices.
"Improved external conditions are likely to support a firm start, with buying interest leading the way," said Keisuke Tsuruta, senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities.
Still, he added that the pace of short-covering in government bonds may gradually lose momentum due to persistent uncertainty surrounding the conflict.
Trump postponed a threat to bomb Iran's power grid because of what he described as productive talks with unidentified Iranian officials. Iran, however, denied that it had engaged in negotiations with the U.S.
The 20-year JGB yield JP20YTN=JBTC slid 2 bps to 3.145%. The 30-year yield JP30YTN=JBTC sank 1 bps to 3.550%. Other tenors were yet to be traded as of 0023 GMT.
Japan's core consumer inflation hit 1.6% in February to slide below the Bank of Japan's 2% target for the first time in nearly four years, data showed on Tuesday, complicating its efforts to justify further interest rate hikes.
The finance ministry is set to auction about 400 billion yen of 40-year bonds later in the day.
