Japanese government bond (JGB) yields rose on Monday, trimming some of last week's sharp decline as demand for safe-haven assets eased following a recovery in technology stocks.

The benchmark 10-year JGB yield climbed 6.5 basis points to 2.7%, recovering part of its losses from Friday, when investors sought refuge in government bonds amid a deepening selloff in artificial intelligence-related shares. Bond yields move inversely to prices.

Japan's benchmark Nikkei 225 index rebounded on Monday after plunging 6% in the previous session, easing some demand for traditional safe-haven assets.

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US Treasuries also fell in the latest session, pushing yields higher after stronger-than-expected payroll data boosted expectations that the Federal Reserve could raise interest rates at its December meeting.

JGB yields are recovering amid continued uncertainty over the outlook for AI-related investments and broader financial market volatility. However, the speed of last week's yield decline has also raised the possibility of a near-term correction.

The five-year JGB yield advanced 5.5 basis points to 2.1%, while the two-year yield, which is particularly sensitive to expectations for Bank of Japan monetary policy, remained unchanged at 1.725%.

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Meanwhile, expectations of further monetary tightening by the Bank of Japan have strengthened. The central bank has kept its policy rate at 1.25% since raising it in September, but has adopted a more hawkish stance, with markets increasingly pricing in a potential rate hike to 1.5% in December.

BOJ Governor Kazuo Ueda said on Friday that underlying inflation was expected to remain around the central bank's 2% target, while acknowledging some upside risks.

Investors are now assessing the competing influences of global technology-sector volatility, changing expectations for US monetary policy and the BOJ's tightening trajectory on Japanese bond markets, Reuters reported.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)