Naomi Hasegawa Japanese Quotations

US Treasuries, particularly long-term bonds, were robust on Friday, when the Japanese market was closed. Some bond investors view the surge in stocks as bubble while some investors take comfort in the view that the zero-interest rate policy will continue even after the Bank of Japan lifts ultra-loose monetary stance.

Deposits stopped growing and household money is heading increasingly to risk assets and will continue to do so as long as Japanese interest rates are zero.

The report suggests we're one step closer to the Bank of Japan's exit from its current loose monetary policy. That's negative for Japanese government bonds.

In addition a report that Japanese banks stepped up the reduction in their JGB holdings also weighed on sentiment here.