Asia Pacific bonds rally ahead of RBA rates decision

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Sovereign bonds in the Asia Pacific region were enjoying a fillip ahead of Tuesday’s interest rates decision from the Reserve Bank of Australia.

Yield, which moves inversely to price, on Australia’s 10-year government bonds was down 7 basis points at 2.6 per cent, the lowest level since November 17. Economists widely expect the central bank to hold its cash rate target at 1.5 per cent.

New Zealand’s 10-year notes saw yield fall the same amount, to 3.069 per cent.

While yield on 10-year Japanese government bonds fell 1bp to 0.057 per cent, that on 10-year US Treasuries was up 1bp at 2.334 per cent after falling seven basis points overnight.

South Korean 10-year government bond yield was down 1bp at 2.134 per cent amid a selloff of $918m, the largest single-day drop since October.

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