TOKYO: Japanese government bonds skidded on Friday, with yields soaring off record lows notched in the previous session and the superlong tenor bearing the brunt of the selling.
The 20-year yield jumped 7.5 basis points to 0.170 after plumbing a record low 0.090 percent on Thursday. The 30-year yield rose 8.5 basis points to 0.230 percent, moving away from a record low 0.150 percent marked in the previous session.
The 10-year JGB yield added 5.5 basis points to minus 0.150 percent. It had dropped to a record low of minus 0.210 percent on Thursday against a backdrop of growing fears that Britain could vote to leave the European Union in a June 23 referendum.
Campaigning for the vote was halted after a British member of parliament was shot and fatally wounded on Thursday.
June 10-year futures ended down 0.48 point at 152.25.
"We think JGBs were overbought, so we exited our position," said Tadashi Matsukawa, head of Japan fixed income at PineBridge Investments in Tokyo.
"We might get back in, depending on what happens with Brexit, but JGBs themselves probably have already hit their near-term peak," he said.
JGB prices accelerated their losses after poor demand at a "liquidity-enhancing" auction. Japan's Ministry of Finance regularly conducts these auctions of already-issued debt to improve market liquidity, but many investors were unwilling to buy at lofty price levels, market participants said.
Tokyo stocks clawed back some of the ground they had lost on Thursday, which also undermined demand for bonds.
The Nikkei stock index had shed 2 percent in the previous session after the Bank of Japan held monetary policy steady as expected at the conclusion of its two-day meeting.
Earlier on Friday, Japan's government kept its assessment of the economy unchanged this month but warned that consumer prices are rising at a slower pace, casting more doubt on policymakers' three-year effort to shake off deflation.
Comments
Comments are closed.