TOKYO, July 29 (Reuters) - Japan's 10-year government bond yields fell to near four-and-a half-month low on Friday, tracking U.S. Treasury yields which declined overnight after U.S. economy contracted again in the second quarter.
The 10-year JGB yield fell 2.5 basis points to 0.175%, its lowest since March 10.
"Upward pressure on Japan's 10-year yields from overseas peers has weakened. Also BOJ Governor (Haruhiko) Kuroda reiterated that the central bank would not adjust its yield curve control (YCC)," said Takayuki Miyajima, senior economist at Sony Financial Group.
Under yield curve control (YCC), the BOJ sets an implicit 0.25% cap around its 0% target for the 10-year bond yield to keep borrowing costs low and stimulate the economy.
Yields have dropped steadily since mid-June, when bets that the Bank of Japan will be forced to join its hawkish global peers and tweak its yield-curve-control policy were at their extreme.
Last week, Kuroda brushed aside the chance of near-term policy tightening, saying he had "absolutely no plan" to raise interest rates or hike the 0.25% cap.
Yields on longer-end notes also fell, with the 20-year JGB yield declining 1.5 basis points to 0.840% and the 30-year JGB yield slipping 2 basis points to 1.185%.
"Yields on super-long notes are also on the decline as uncertainties about the direction of the yields have eased," Miyajima said.
The 40-year JGB yield fell 1.5 basis points to 1.350%.
Benchmark 10-year JGB futures rose 0.23 point to 150.48, with a trading volume of 12,205 lots. (Reporting by Junko Fujita)
