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The biggest losers in the $13.6 trillion Treasuries market this month are staging a comeback as investors await policy decisions from the Federal Reserve and the Bank of Japan.
U.S. 30-year yields fell by the most in two weeks as Treasuries joined a global bond rally. Wagers that the Bank of Japan may move to lift long-term yields at its meeting this week helped push U.S. 30-year bonds to a 4.4 percent loss this month through Sept. 19.
Both central banks will release policy decisions Sept. 21.
"Today's more of a global driver — people are setting up for the BOJ overnight," said Gennadiy Goldberg, an interest-rate strategist at TD Securities (USA), one of the Fed's 23 primary dealers. "You've had a very large steepener going into effect globally over the past couple of weeks, and there's a lot of position paring going on."
The U.S. 30-year bond yield declined three basis points, or 0.03 percentage point, to 2.43 percent as of 2:05 p.m. in New York, according to Bloomberg Bond Trader data, after falling as low as 2.4 percent. The yield is on pace for the biggest drop since Sept. 6. The price of the 2.25 percent security due in August 2046 was 96 9/32.
The extra yield investors demand to own 30-year rather than five-year securities dropped for a third straight day, to about 1.23 percentage points. The measure of the yield curve had previously steepened for 11 straight days, the longest streak since 2012.
The yield on Japanese 30-year debt fell five basis points, the most since Sept. 7, while German 30-year yields tumbled seven basis points, data compiled by Bloomberg show.