TOKYO: Japanese government bond prices edged up on Wednesday against a backdrop of global market turmoil as Republican Donald Trump took an unexpected lead in the U.S. presidential election.
The prospect of a Trump victory sent many investors into risk aversion mode, triggering shock waves across risk assets. Japan's Nikkei stock index plunged 5.4 percent.
JGB moves were miniscule by comparison. The 10-year JGB yield edged down 1 basis point (bp) to minus 0.080 percent after falling as low as 0.085 percent, its lowest since Sept. 30. It edged up to minus 0.065 percent earlier in the session, when the presidential race appeared closer.
"JGB movements are quite limited, compared to FX and equity markets," said Tadashi Matsukawa, head of fixed income investment at PineBridge Investments in Tokyo.
"The JGB market has somewhat decoupled from the rest of the markets. It seems that the reaction is limited at this point," he said.
December 10-year JGB futures ended up 0.15 point at 151.95.
In the superlong zone, the 20-year JGB yield fell 1 bp to 0.350 percent, while the 30-year yield slipped 2 bps to 0.475 percent.
The Bank of Japan introduced a new policy in September of controlling the yield curve, guiding the 10-year yield to around zero percent to keep down short- to medium-term borrowing costs while allowing super-long yields to rise. That has underpinned Japanese investors' demand for longer maturities.
Japan's Ministry of Finance will auction 800 billion yen ($7.81 billion) of 30-year JGBs on Thursday.
Comments
Comments are closed for this article.