TOKYO: Japan’s 10-year government bond (JGB) yield retreated from a session high and turned flat on Tuesday after an auction witnessed firm demand. The 10-year JGB yield rose to as high as 1.135% but was last flat at 1.125%.
“The yield tracked US Treasury yields higher earlier in the session but it retreated before the auction on expectations that the auction would attract investors,” said Miki Den, senior Japan rate strategist at SMBC Nikko Securities.
The auction for 10-year JGBs was well-received, strategists said, with the tail - the gap between the lowest and average price - narrowing to 0.01 point from 0.05 point at the previous auction, a sign of strong demand. Yields on other maturities rose too, tracking US Treasury yields higher.
The benchmark 10-year Treasury yield hit the highest since May overnight while the 30-year yield posted a 14-month high, ahead of the Treasury’s auction of longer-dated debt over the next two days.
The two-year JGB yield rose 0.5 basis point (bp) to 0.63% and the five-year yield rose 0.5 bp to 0.785%.
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The 20-year JGB yield rose 0.5 bp to 1.92% and the 30-year JGB yield rose 1 bp to 2.315%.
The 40-year JGB yield rose 2.5 bps to 2.68%.
The yield rose sharper than those for others to reflect weak demand for that tenor, said Den.
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