New Zealand government bond yields will work their way up from "around 4.1 per cent currently to levels closer to five per cent in the months ahead", Stephen Halmarick, economist at Colonial First State Global Asset Management, wrote in a report yesterday."The monetary policy normalisation process expected to get under way in the  dollar bloc countries over the next six to 12 months [means] the likely effect will be a trend to a cyclical pick-up in NZGB yields."This trend to higher bond yields is consistent with a move higher in dollar bloc bond yields, including also in the US and Australia."Like many other bond markets (such as Australia), "the New Zealand bond market has attracted a significant level of international investor interest," Halmarick said. "Attracted by relatively high yields, strong currency and with diversification in mind, global investors have been solid buyers of New Zealand dollar debt."From two per cent in 1993, foreign ownership of the New Zealand government bond market is now at 44 per cent."