JGBs mostly firm on coronavirus fears, curve steepens

• Benchmark 10-year JGB futures rose 0.09 point to 152.86 while the yield on the benchmark 10-year cash JGBs  fell 0.5 basis point to minus 0.065pc.
• The five-year JGB yield fell 1 basis point to minus 0.165pc, also hitting a two-month low, while the two-year yield fell 1 basis point to minus 0.160pc.
• The 20-year JGB yield rose 0.5 basis point to 0.230pc, while the 30-year JGB yield rose 1 basis point to 0.365pc.

TOKYO: Short- to medium-term Japanese government bond prices gained on Friday as concerns about a widening outbreak of the coronavirus that originated in China kept their safe-haven allure.

But longer-dated bonds gave in to profit-taking as domestic stock prices rebounded, resulting in a steepening of the yield curve.

Benchmark 10-year JGB futures rose 0.09 point to 152.86 while the yield on the benchmark 10-year cash JGBs  fell 0.5 basis point to minus 0.065pc, the lowest level in almost two months.

The five-year JGB yield fell 1 basis point to minus 0.165pc, also hitting a two-month low, while the two-year yield fell 1 basis point to minus 0.160pc.

Short-term paper was also helped by firm results of the two-year JGB auction on Thursday.

On the other hand, long-dated bonds stepped back from recent rallies as stock prices bounced back on strong earnings from some Japanese companies.

The 20-year JGB yield rose 0.5 basis point to 0.230pc, while the 30-year JGB yield rose 1 basis point to 0.365pc.

However, on a monthly basis, the 20-year yield posted its first fall in five months.