Bloomberg News

Treasuries Rise as Japan GDP Underscores Global Slowdown

August 12, 2012

Treasuries rose for a second day after a report showed Japan’s economy grew less than analysts predicted in the second quarter, underscoring concern the global expansion is slowing.

U.S. government securities rose Aug. 10 after China reported exports gained 1 percent in July from the year before, versus 11.3 percent in June. Japan’s gross domestic product increased an annualized 1.4 percent in the three months through June 30, compared with a revised 5.5 percent in the first quarter, the Cabinet Office said in Tokyo today. A Bloomberg News survey of economists projected 2.3 percent.

“The flight to quality and a slowing global economy will push yields down,” said Hajime Nagata, who helps oversee the equivalent of $131.7 billion as an investor in Tokyo at Diam Co., a unit of Dai-Ichi Life Insurance Co., Japan’s second- biggest life insurer.

Benchmark 10-year yields declined two basis points, or 0.02 percentage point, to 1.64 percent as of 9:33 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in August 2022 advanced 5/32, or $1.56 per $1,000 face amount, to 99 27/32.

The euro area economy probably shrank 0.2 percent in the second quarter, economists surveyed by Bloomberg predicted before the report tomorrow.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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