TOKYO: Japanese government bond prices rebounded on Wednesday after an auction of 1.2 trillion yen ($11.2 billion) 20-year JGBs drew solid bids, pulling yields back from 3-month highs.
The 10-year JGB yield dropped 2.0 basis points to 0.555 percent, having reversed an earlier rise to a three month-high of 0.580 percent.
The 20-year JGB auction drew bids 3.89 times the offer, above the bid-to-cover ratio of 3.62 in the previous auction last month.
The strong auction results pointed to firm demand from life insurers and pension funds.
The price of 10-year JGB futures rose 0.24 point, the largest gain in more than five months.
At the shorter end of the curve, the one-year government discount bill yields fell to -0.005 percent, its first fall below zero percent, following shorter yields that have hit negative levels earlier this month.
Dealers snatched bills on anticipation that the Bank of Japan would buy the paper at even lower negative yields at its bill buying operation.
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