JGBs fall on strong equities and ECB stimulus

TOKYO: Japanese government bond prices edged lower on Friday as equities rallied and investors digested the European Central Bank's (ECB) stimulus efforts.

Japan's Nikkei average rose to a 3-1/2 month high on hopes of a economic rebound.

In the global bond market, German bund and US Treasury yields jumped on Thursday, as the ECB boosted its emergency bond purchases.

However, market participants refrained from taking strong positions as they braced for nonfarm payrolls data on Friday, which is expected to show a further increase in US unemployment.

Benchmark 10-year JGB futures dipped 0.20 points to 151.56, with a trading volume of 27,429 lots, while the 10-year JGB yield gained 2 basis points to 0.045pc.

The 20-year JGB yield and the 40-year JGB yield were up 1.5 basis points each to 0.395pc and 0.590pc, respectively, while the 30-year JGB yield rose 2 basis points to 0.560pc.

At the shorter end of the market, the two-year JGB yield rose 1.5 basis points to minus 0.155pc, while the five-year yield added 2 basis points to minus 0.090pc.

The Bank of Japan increased the amount of 5-10 year bonds in its regular operation to 400 billion yen on Friday but kept 1-3 and 3-5 year bonds unchanged, resulting in little reaction from the JGB market.