JGBs mixed as US-China tensions heighten

• Benchmark 10-year JGB futures rose 0.08 point to 152.44, with a trading volume of 12,190 lots, while the 10-year JGB yield edged down half a basis point to minus 0.010pc.
• At the short-end of the market, the five-year yield fell 1 basis point to minus 0.145pc while the two-year JGB yield ended flat at minus 0.180pc.

TOKYO: Japanese government bond prices were mixed on Friday with growing risk-off sentiment as investors were wary of diplomatic tensions between China and the United States.

Benchmark 10-year JGB futures rose 0.08 point to 152.44, with a trading volume of 12,190 lots, while the 10-year JGB yield edged down half a basis point to minus 0.010pc.

At the short-end of the market, the five-year yield fell 1 basis point to minus 0.145pc while the two-year JGB yield ended flat at minus 0.180pc.

The superlong zone moved in a different direction, with the 30-year JGB yield gaining half a basis point to 0.445pc, while the 20-year JGB yield and the 40-year JGB yield were unchanged at 0.315pc and 0.460pc, respectively.

Some analysts said market players adjusted their positions ahead of 500 billion yen 40-year bond sale by the Ministry of Finance next week.

The Bank of Japan held an emergency meeting earlier on the day and finalised its new lending scheme to channel more money to small businesses.

The BOJ maintained its current monetary policy of short-term interest rate target at minus 0.1pc and a pledge to guide 10-year government bond yields around 0pc.?

Market reaction to the BOJ meeting was limited as its decisions were widely anticipated, analysts said.

Separately, government data on Friday showed that Japan's core consumer prices fell 0.2pc in April on an annual basis, its first deflation since December 2016.