TOKYO: Japanese government bonds firmed on Tuesday, bolstered by solid demand at a 40-year auction.
The Ministry of Finance sold 399.5 billion yen ($3.35 billion) worth of 40-year JGBs with a 1.7 percent coupon at a highest accepted yield of 1.550 percent. Bids totalled 1.3572 trillion yen, so the bid-to-cover ratio rose to 3.40 times from the previous 40-year sale's 3.18, indicating stronger demand.
The yield on the 10-year cash JGB inched down half a basis point to 0.375 percent.
The superlong zone outperformed, with the 20-year yield falling 1 basis point to 1.185 percent and the 30-year yield falling 2 basis points to 1.405 percent .
Market moves were relatively small as investors remained cautious ahead of comments from US Federal Reserve Chair Janet Yellen later in the day, which could offer clues on the timing of a US interest rate hike as the economy recovers. Speculation of a tightening puts upward pressure on bond yields.
The 10-year JGB futures contract added 0.08 point to 147.50.
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