TOKYO: Japan’s 10-year government bond yield reversed course to fall and futures rose on Thursday after a smooth auction outcome eased investor sentiment.
The 10-year JGB yield fell 1.5 basis points (bps) to 0.415% after rising to as high as 0.435%. The auction received bids worth 3.69 times the amount sold, higher than a ratio of 3.6 times at the previous auction.
The auction tail, or the gap between the lowest and average price, narrowed to 0.04 points from 0.09 points, another sign of firm demand.
Benchmark 10-year JGB futures rose 0.13 yen to 148.73 after falling to 148.50. “The outcome of the auction underpinned declines in the yield,” said Kaoru Shoji, Japan rate strategist at SMBC Nikko Securities.
The two-year JGB yield fell 0.5 bp to -0.065% and the five-year yield fell 0.5 bp to 0.075%.
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The 20-year JGB yield was flat at 1.015%, while the 30-year JGB yield rose 0.5 bp to 1.260%. The 40-year JGB yield rose 0.5 bp to 1.430%.
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