Japanese government bonds are set for a sixth monthly gain, a winning streak that beats Treasurys amid investor speculation the central bank will bolster monetary easing to defeat deflation.
Japanese debt maturing in more than a year has returned 0.3 percent in May, according to an index compiled by the European Federation of Financial Analysts Societies and Bloomberg. While Treasurys have returned 1 percent so far this month, they've handed losses in March and February, the data show.
Bank of Japan Gov. Masaaki Shirakawa and his board have failed to overcome deflation and achieve their 1 percent inflation goal after two monetary easing moves this year, with government data last week showing a 0.2 percent increase in consumer prices excluding fresh food in April. Japan's benchmark 10-year yield was six basis points from a nine-year low as investors perceived the nation's notes as a haven amid concern Greece will exit the euro and roil global markets.