JGBs steady, 30-year sale awaited

TOKYO: Japanese government bonds were steady on Wednesday, underpinned by slumping equities, as investors looked to the next session's 30-year JGB auction.

The benchmark 10-year cash JGB yield was flat on the day at 0.055 percent, and 10-year JGB futures finished up 0.04 point at 150.91.

The 20-year yield was flat at 0.580 percent, while the 30-year yield rose half a basis point to 0.835 percent .

The Nikkei stock average skidded 2 percent, its biggest daily fall since late March.

On Thursday, the Ministry of Finance will auction 800 billion yen ($7.14 billion) of 30-year JGBs.

Earlier on Wednesday, the Bank of Japan offered to buy 50 billion yen of JGBs maturing in up to one year, and 410 billion yen of JGBs maturing in five to 10 years. Those amounts were consistent with the central bank's previous offerings for those zones.

BOJ board member Takako Masai said on Wednesday she did not see a big risk of the country's banking system destabilising as a result of the central bank's ultra-easy policy.

"Banks' lending attitude remains strong and financial intermediation hasn't deteriorated," Masai told a news conference after meeting with business executives in Kobe, western Japan.

In her speech to business leaders, she advocated sticking with an easy monetary policy due to uncertainty over how fast inflation will rise, while warning that the central bank should remain on guard against the possible side-effects.