TOKYO: Benchmark Japanese government bond yields crept higher ahead of a 10-year sale on Tuesday, but not before yields marked their lowest in a decade on continued expectations of vigorous easing from the Bank of Japan.
The government's nominees to be BOJ deputy governors, Hiroshi Nakaso and Kikuo Iwata, underscored on Tuesday their commitment to beat deflation if appointed.
The yield on the benchmark 10-year JGB added half a basis point to 0.610 percent after earlier dropping as low as 0.585 percent, its lowest since June 2003.
The Ministry of Finance offered 2.4 trillion yen ($25.7 billion) of 10-year JGBs with a coupon of 0.6 percent, the lowest since June 2003's 0.5 percent.
"Even with that coupon, auction demand will probably be robust due to the timing at the end of the fiscal year, as well as the BOJ expectations," said a fixed-income fund manager at a Japanese asset management firm.
Japanese investors continued buying ahead of the March 3 financial year-end, he said.
The 10-year JGB futures contract, slipped 0.12 point after rising to a morning session peak of 145.38, an all-time high.
Superlong bonds continued their rally, with the 30-year bond yield shedding 1.5 basis points to 1.660 percent, its lowest level since August 2010. In the previous session, the 30-year yield plunged fell 9.0 basis points, its biggest daily fall since mid-2010.
The 20-year yield also wallowed at its lowest levels since mid-2003, losing 1 basis point to 1.480 percent after cratering 9 basis points on Monday.
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