TOKYO: Japanese government bond prices rose on Monday, with the 20-year yield hitting a five-week low, tracking firmer US Treasuries as slower-than-expected US jobs growth raised uncertainty over when the Federal Reserve will scale back its stimulus.
The 10-year yield slipped 2.5 basis points to 0.780 percent after gaining 3 basis points last week, while the 10-year futures were up 0.37 point at 143.73 after trading as much as 143.78 to a two-week high.
"The report was slightly weaker than expected but it was sort of on the expected level," said a fixed-income fund manager at a Japanese asset management firm in Tokyo.
"JGB buyers will not change their mind even though if the Fed changes its monetary policy. If the Fed hikes the interest rates, then it will have a big impact. But no one expects such a big change."
US employers slowed their pace of hiring in July but the jobless rate fell, a pair of mixed signals that could make the Federal Reserve more cautious about drawing down its huge economic stimulus programme.
The Bank of Japan offered to buy 700 billion yen ($7.1 billion) of JGBs with residual maturities of one to more than 10 years, as part of its aggressive monetary stimulus policies to revive the world's third-largest economy.
The Japanese central bank is expected to keep monetary policy on hold at a two-day meeting starting on Wednesday as its unprecedented quantitative easing and government stimulus gradually spread through the economy.
The five-year yield dipped 1.5 basis points to 0.285 percent and came off a two-week high touched in the previous session.
The 30-year yield was down 1.5 basis points at 1.805 percent, more than recovering last week's 1 basis point rise, while the 20-year yield eased 1.5 basis points to 1.695 percent after hitting a five-week low of 1.690 percent.
The Ministry of Finance is to sell 500 billion yen of 30-year bonds on Friday.
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