By Sam Goldfarb 

U.S. Treasury yields registered their biggest one-day decline since early November on Thursday, reflecting renewed demand for government debt after sustained selling in the first quarter.

The yield on the benchmark 10-year U.S. Treasury note settled at 1.531%, according to Tradeweb, compared with 1.637% on Wednesday.

Yields, which fall when bond prices rise, edged lower overnight before dropping sharply near the start of U.S. trading, and continued their slide throughout much of the session. That came despite a strong retail sales report that might normally be expected to push yields higher since they tend to rise when the economic outlook improves.

Debt investors, though, have shrugged off good economic data in recent days as much as they ignored some weak data over the winter. Instead, higher yields have lured buyers, apparently aided by technical factors such as renewed demand from Japanese investors.

Banks and insurers in Japan had contributed to a wave of global selling in February, according to investors and analysts, prompted by efforts to finalize their investment returns for the financial year that ended on March 31. Now, there is evidence that they are buying again, with new government data showing that Japanese investors bought the equivalent of $15.6 billion of overseas bonds on net last week, the most since November.

One factor supporting Treasurys right now is that "April was always going to be a transition month," said Jim Vogel, interest-rates strategist at FHN Financial.

Investors sold Treasurys earlier in the year because they were optimistic for a Covid-19 vaccine and government spending-fueled economic rebound that could generate higher inflation and, eventually, interest-rate increases from the Federal Reserve. Now they are more interested in seeing that forecast come to fruition, but they need more than one month of data to know if it has, Mr. Vogel said.

Thursday's move marked the biggest decline in the 10-year Treasury yield since Nov. 4, the day after the U.S. election when it seemed unlikely that Democrats would gain control of the Senate as many investors had been expecting. Yields quickly rebounded that month when Pfizer Inc. reported encouraging coronavirus vaccine results. They then got another boost in January when Democrats ultimately did take the Senate by winning two runoff elections, thus improving the chances of large-scale stimulus spending.

Treasury yields still remain much higher than where they started the year.

The 10-year finished last year at 0.913%. The yield on the 30-year bond settled Thursday at 2.210%, down from 2.325% Wednesday but up from 1.642% at the end of last year.

Write to Sam Goldfarb at


(END) Dow Jones Newswires

April 15, 2021 16:30 ET (20:30 GMT)

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