TOKYO, April 15 (Reuters) - Japanese government bond yields fell from recent peaks on Monday as investors shifted into the safest assets amid an escalation in tensions in the Middle East.
The 10-year JGB yield declined 1 basis point (bp) to 0.850% as of about 0500 GMT, retreating from the five-month high of 0.860% reached at the end of last week. Bond yields fall when prices rise.
The two- and five-year yield also lost 1 bp each to 0.265% and 0.480%, respectively. The two-year yield reached the highest since 2009 on Friday, while the five-year yield touched the highest since 2011.
Longer-dated JGBs though were less affected, with the 20-year yield down 0.5 bp to 1.630% and the 30-year yield flat at 1.910%.
Iran launched an unprecedented direct attack on Israeli territory over the weekend, a retaliatory strike that raised the threat of a wider regional conflict, driving investors into bonds, gold and other haven assets.
JGB yields had been rising over the past week primarily amid a climb in U.S. Treasury yields as heated consumer inflation data forced traders to push back bets on the timing of the first rate cut by the Federal Reserve.
"Considering the excessive influence of U.S. interest rates and geopolitical risks from the Middle East, it is currently advisable to avoid JGBs in favor of a simple investment in three-month U.S. dollar T-bills," said Shoki Omori, chief Japan desk strategist at Mizuho Securities. (Reporting by Sohini Goswami)
