Following the adjustments made by investors after the previous session saw Japanese Government Bonds (JGB) yields slide, and as US Treasury yields rose up from two-month lows, JGB yields were mixed Thursday.

After hitting its lowest level since October 17th yesterday, the 10-year JGB yield was last down 0.5 basis points (bp) at 0.790%. Meanwhile, the 30-year JGB yield increased to as much as 1.735%, before backtracking 1 bp to 1.710%.

In spite of signs indicating inflation in the US is slowing, US Treasury yields rebounded overnight following revised retail sales data which demonstrated strong gains in September. The 10-year benchmark was at roughly 4.5% in Asian hours.

Takeshi Ishida, strategist at Resona Holdings, noted that even despite the sensitivity of JGBs to fluctuations in Treasury yields, “Japan’s interest rate fell too much (on Wednesday), so I think there’s a bit of an adjustment reaction happening.”

On Wednesday, JGB yields dropped precipitously across maturities as they followed the fall in their US counterparts, and the Bank of Japan (BoJ) reduced the amounts offered for its regular purchases of JGBs.

The yield on the 20-year JGB increased 1 bp at 1.515%.

Meanwhile the 2-year JGB yield slid down 0.5 bp to 0.055%.

Strategists also note that disappointing GDP data coming out of Japan may be creating uncertainty among investors over the timeline on the BoJ’s exit from the presently ultra-lax monetary policy.

Data released Wednesday showed that in the July-September period, the nation’s economy contracted, ending two-consecutive quarters of expansion, due to soft consumption and weak exports.

Ryutaro Kimura, fixed income strategist at AXA Investment Managers said that the latest data on the GDP “underscores the persisting challenges… casting doubt on the BOJ’s scenario for achieving its inflation target with a positive cycle of inflation and wage growth.”

There are expectations that the central bank of Japan will end the negative interest rates early next year.