JGBs gain on expectations of stricter domestic virus curbs

• Benchmark 10-year JGB futures rose 0.70 point to 152.61, though the trading volume was light at 13,667 lots.
• The 10-year JGB yield fell 2.5 basis points to 0.005pc, off a 16-month high of 0.095pc touched a week ago.

TOKYO: Japanese government bond prices gained on Thursday on rising expectations Japan would impose more radical social distancing measures to arrest the breakneck spread of the coronavirus.

A recovery in US stock futures triggered by a $2 trillion stimulus package has run out of steam, further boosting demand for safe-haven assets such as government bonds.

Benchmark 10-year JGB futures rose 0.70 point to 152.61, though the trading volume was light at 13,667 lots.

The 10-year JGB yield fell 2.5 basis points to 0.005pc, off a 16-month high of 0.095pc touched a week ago.

Tokyo's governor has advised against non-essential outings until April 12, and the Japanese government was preparing to set up special headquarters to deal with the outbreak as early as Thursday afternoon.

The 20-year JGB yield was flat at 0.295pc, while the 30-year JGB yield was also unchanged at 0.415pc.

The two-year JGB yield fell 1 basis point to minus 0.260pc, the lowest level in two weeks, while the five-year yield fell 1 basis point to minus 0.115pc.

The 40-year JGB yield rose 1 basis point to 0.445pc, however, as the market absorbed fresh supply from a 400 billion yen ($3.62 billion) 40-year JGBs auction on Thursday.

The bid-to-cover at the auction dropped to 2.66 from 2.86 in the previous auction.