TOKYO: Benchmark Japanese government bond prices firmed on Wednesday, while the superlong zone edged lower after lacklustre demand at a 20-year auction.
The 10-year JGB yield inched down half a basis point to minus 0.240 percent, while September 10-year futures added 0.16 point to end at 153.28.
But the 20-year JGB yield rose 1.5 basis points to 0.150 percent, and the 30-year JGB yield climbed 2 basis points to 0.210 percent.
A downturn in stocks supported bonds, with the Nikkei stock index shedding 0.3 percent.
Expectations are also growing among investors that the Bank of Japan will take further stimulus steps at its July 28-29 meeting.
"If the BOJ does nothing, JGBs will initially sell off. But risk assets anticipate that the BOJ will act next week, so risk assets will go down more, and that will be supporting the JGB market as usual," said Tadashi Matsukawa, head of fixed income investment at PineBridge Investments in Tokyo.
On Wednesday, the Ministry of Finance offered 1.1 trillion yen ($10.4 billion) of 20-year JGBs with a 0.2 percent coupon.
The notes sold at a lowest price of 100.85, drawing bids of 3.46 times the amount offered, below the previous sale's bid-to-cover ratio of 3.61 times.
The tail between the average and lowest accepted prices widened to 0.17, compared with that of last month's offering at 0.15, indicating slightly weaker demand for the bonds.
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