JGB yields dip as Fed's Powell softens hawkish stance

TOKYO: Japanese government bond (JGB) yields dipped on Wednesday, tracking US Treasury yields lower overnight, as investors bought back debt following less hawkish comments from Federal Reserve Chair Jerome Powell.

The 10-year JGB yield fell 2.5 basis points (bps) to 0.125% and the 20-year JGB yield fell 2.5 bps to 0.505%.

Powell told a congressional hearing on his confirmation for a second term at the helm of the central bank that the economy could weather the COVID-19 surge and was ready for tighter monetary policy.

JGB yields track firmer US peers despite BOJ's auction outcome

Yields on longer ended notes also fell, with the 30-year JGB yield losing one basis point to 0.705% and the 40-year JGB yield also falling one basis point to 0.745%.

Yields on short-end bonds also fell even as a government auction for five-year notes weakened. The auction received bids worth 3.34 times the securities sold, lower than a bid-cover ratio of 3.63 times at the previous auction.

The five-year yield fell 2 bps to minus 0.050% and the two-year JGB yield fell 0.5 basis point to minus 0.085%.

Benchmark 10-year JGB futures rose 0.29 point to 151.05, with a trading volume of 34,902 lots.