Japanese government bonds rose Wednesday, pushing 10-year yields below 1 percent for the first time since August 2003, as the yen's advance to an eight-month high against the dollar damped the outlook for exporters' earnings.

Ten-year bonds gained for a fifth day on speculation the surging yen will increase deflationary pressure, enhancing the purchasing power of the fixed payments from debt.

Bonds also advanced as Asian stocks fell before U.S. reports this week that economists predict will show service industries grew at a slower pace and payrolls shrank for a second month.