TOKYO: Japanese government bond yields fell to multi-month lows on Tuesday, pulled down by declines in US rates and a smooth auction of 20-year bonds.
The 10-year JGB yield fell 4 basis points (bps) to 0.700% as of 0430 GMT, its lowest since Sept. 15 and extending declines after the finance ministry released the auction results.
The auction tail - the difference between the lowest price paid and the average price - shrank to 0.14 yen from 0.43 yen at last month’s sale.
A shorter tail signals higher demand.
The 20-year yield slid 6 bps to 1.400%, the lowest since Sept. 8.
The 30-year yield dropped 3.5 bps to 1.630% early in the session, a level not seen since Aug. 18, and had yet to trade following the auction result.
“People turned bullish on longer-end JGBs,” amid a decline in US yields and “decent” demand at the 20-year JGB sale, said Shoki Omori, chief Japan desk strategist at Mizuho Securities.
“The tone in the market is changing.”
At the shorter end, the five-year yield fell 3.5 bps to 0.270%, the lowest since Sept. 15.
The two-year yield eased 0.5 bp to 0.035%. Benchmark 10-year US Treasury yields edged lower to 4.3985% in Asia hours on Tuesday, approaching Friday’s two-month low of 4.3790%.
It had reached a high of 5.0210% last month, a level last seen in mid-2007.