Japan's benchmark 10-year yield hit a three-week high Wednesday amid stock-market gains and speculation that overseas economic conditions are set to improve.
Traders said long-term bonds may extend price losses, pushing up yields, if Friday's U.S. employment report for January is better than expected, adding to evidence the economy is recovering.
"Yields in the long-term zone may come under upward pressure, if economic recovery abroad fuels speculation that overseas central banks will likely exit [from monetary easing], and if that speculation sends the yen lower," said Makoto Yamashita, a strategist at Deutsche Securities.
The 10-year yield rose 0.01 percentage point to 1.355%, its highest level since Jan. 12.
Among Asian debt issuers, the Asian Development Bank sold its first global bond for this year, raising $2.5 billion to augment funds intended to be lent out to its fast-recovering member-countries.
The Manila-based development bank late Tuesday priced its 2.625% bond due Feb. 9, 2015, at 99.642, paying a yield of 2.702%, equivalent to 0.02 percentage point over the midswaps rate, or 0.3415 percentage point over the comparable U.S. Treasury yield, according to a term sheet.
Triple-A-rated ADB said it plans to raise around $15 billion from the debt market for the whole of 2010. Last year, it raised $10.4 billion in debts of various currencies.
ADB's bond sale came as development banks around the globe were seeking to sell debt in the high-grade international bond market. The African Development Bank Tuesday raised $1 billion in a sale of three-year global bonds. The Council of Europe was in the market with a five-year bond.
Separately, Indonesian petrochemical company PT Chandra Asri, through issuer Altus Capital Pte, Wednesday priced a $230 million five-year global bond to yield 13.5%, according to a person familiar with the deal.
The yield is at the top of the revised guidance of 13.0% to 13.5%. The speculative-grade bond is callable after three years.
