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(Bloomberg) — Treasuries tend to rally in the month of April. U.S. government securities have advanced in the period every year from 2010 to 2014, according to data compiled by Bloomberg. One theory for the gain is that Japanese investors are buying as they begin their fiscal year on April 1. Kei Katayama at Daiwa SB Investments in Tokyo said he’s noticed the trend, driven by higher yields than those available in Japan. “Before the end of March or in the first few weeks of April, the new positions are set,” said Katayama, a senior fund manager at the company, which has the equivalent of $40.8 billion in assets. “For the first few weeks of April, there may be buying pressure” in Treasuries, he said. The benchmark U.S. 10-year yield was little changed at 1.93 percent as of 10:04 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 2 percent note due in February 2025 was 100 21/32. Treasuries have fooled analysts already this year, with the 10-year yield falling 25 basis points in the first quarter. The average forecast from economists surveyed by Bloomberg at the end of 2014 was for an increase to 2.55 percent.
Katayama said he’ll be reluctant to bet against Treasuries for the next few weeks. Ten-year Treasuries yielded about 1.53 percentage point more than same-maturity bonds in Japan. The spread is less than the average over the past decade of about 2 percentage points, reflecting demand for the U.S. securities. Japan has built a stake of $1.2386 trillion in U.S. debt, pulling within $1 billion of China as America’s largest foreign creditor, Treasury Department data show.
So while traders face a day famous for its pranks, demand for the yield Treasuries offer remains a serious draw.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net Tomoko Yamazaki