TOKYO: Japan’s 30-year government bond yield edged down on Tuesday, as an auction for bonds with the same maturity received strong demand. The 30-year yield fell 0.5 basis point to 2.105%.
The yield had hit 2.135% ahead of the auction earlier in the session, its highest level since Aug. 8.
“The auction outcome indicated that investors wanted to buy 30-year bonds at this yield level,” said Miki Den, senior Japan rate strategist at SMBC Nikko Securities.
The auction received bids worth 3.34 times the amount sold, slightly below 3.4 times in the previous auction.
However, the tail, or the gap between the lowest and average price, narrowed to 0.1 point from 0.2 point, indicating stronger demand.
The five-year yield fell 0.5 bp to 0.535%. “Japanese banks, which had bought 20-year JGBs to as they sought higher yields, might have sold those bonds to buy five-year bonds,” said Den.
Japan bond yields steady as traders wait for policy clues
The 20-year yield rose 0.5 bp to 1.705%. The benchmark 10-year yield rose to as high as 0.93%, tracking US yields, but was last up 0.5 bp at 0.925%.
The benchmark US Treasury 10-year yield topped 4% for the first time in more than two months overnight, as markets reduced bets of another super-sized rate cut following Friday’s strong US jobs report.
The two-year yield rose to as high as 0.41% earlier in the session, its highest level since Aug. 2, and was last at down 0.5 bp at 0.4%.
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