JGBs slip after weak BOJ operation, fail to capitalise on stock losses

TOKYO: Japanese government bond prices sagged on Friday, following tepid results of a bond operation by the Bank of Japan and amid a lack of follow-through buying after initial gains on global stocks sell-off.

The 10-year JGB yield rose 0.5 basis point to 0.010pc, bouncing back after falling below zero percent for the first time since late May.

Although the yield fell earlier on global stock market sell-off on doubts about the economic recovery scenario, few investors were ready to buy negative-yielding bonds.

The 20-year JGB yield also edged up 1.5 basis points to 0.370pc after dipping to 0.345pc earlier in the day.

The 30-year JGB yield rose 1.5 basis points to 0.530pc.

At the shorter end of the market, the two-year JGB yield rose 0.5 basis point to minus 0.160pc, while the five-year yield gained 0.5 basis point to minus 0.110pc.

The Bank of Japan bought 1-3 and 3-5 year maturities in its operation on Friday, keeping the size of its buying unchanged from previous operations at 340 billion yen ($3.17 billion) and 320 billion yen respectively.

The buying drew fairly large selling interest from brokers, helping to push down prices.

Benchmark 10-year JGB futures price rose 0.02 point to 152.19, with a trading volume of 13,649 lots.