JGBs mostly edge down, 30-year sale provides some support

TOKYO: Japanese government bonds mostly edged down on Wednesday, though a decent demand at a 30-year auction underpinned the superlong zone.

The 10-year cash JGB yield inched up half a basis point to 0.060 percent, while the 10-year JGB futures contract finished down 0.03 point at 150.40.

At the Ministry of Finance's sale of 800 billion yen of 30-year JGBs with a 0.80 percent coupon, some 55.0218 percent of the bids were accepted at the lowest price of 98.00.

The sale drew bids of 3.98 times the amount offered, up from the previous sale's bid-to-cover ratio of 3.67 times, suggesting improved demand.

The 20-year JGB yield was steady on the day at 0.590 percent, while the 30-year JGB yield was also flat at 0.880 percent.

Higher U.S. Treasury yields also put upward pressure on JGB yields. The yield on the benchmark 10-year U.S. note stood at 2.358 percent in Asian trading, up from its U.S. close of 2.345 percent on Tuesday.

Investors in Tokyo remained wary ahead of a general election this month. Prime Minister Shinzo Abe hopes to convince voters in the Oct. 22 elections that his "Abenomics" plan consisting of aggressive monetary stimulus, fiscal spending and reform has improved the economy enough to stoke a sustainable recovery.

The JGB market shrugged off data released early on Wednesday that showed Japan's core machinery orders rose for a second straight month in August, handily beating market expectations and signalling a pickup in capital expenditure.