Long-dated JGBs dip on lukewarm 40-year bond auction

TOKYO: Longer-dated Japanese government bond prices dipped on Tuesday, causing the yield curve to steepen slightly, after an auction of 40-year debt drew lukewarm demand from investors.

The five-year yield was flat at minus 0.125 percent, with overnight gains by U.S. Treasuries and sagging Tokyo equities lending support.

The 40-year yield, on the other hand, rose 1.5 basis points to 1.020 percent.

The bid-to-cover ratio, a gauge of demand, at Tuesday's 500 billion yen ($4.5 billion) 40-year JGB auction slipped to 3.0 from 3.24 at the previous sale in September.

The Bank of Japan's decision on Friday to slightly trim the amount of longer maturity bonds it buys at regular purchasing operations was seen to have dented demand for 40-year JGBs.