JGBs steady to slightly weaker on supply concerns

• The liquidity enhancing auction, in which the Ministry of Finance re-offer existing JGB issues to boost their market liquidity, drew tepid bids.
• Benchmark 10-year JGB futures dropped 0.08 point to 152.49, while the 10-year cash JGB yield rose half-a-basis point to minus 0.030pc.
• The 20-year and the 30-year yields stood flat at 0.255pc and 0.385pc, respectively.

TOKYO: Japanese government bond (JGB) prices were steady to slightly softer on Friday following weak results of a re-offering auction and as investors retreated to sidelines ahead of more auctions next week.

The liquidity enhancing auction, in which the Ministry of Finance re-offer existing JGB issues to boost their market liquidity, drew tepid bids.

That did not bode well for next week's heavy auction schedule - 1.9 trillion yen of five-year JGB on Tuesday and 0.9 trillion yen of 20-year JGB on Thursday.

Benchmark 10-year JGB futures dropped 0.08 point to 152.49, while the 10-year cash JGB yield rose half-a-basis point to minus 0.030pc.

At the shorter end of the market, the five-year yield added half-a-basis point to minus 0.130pc, while the two-year yield rose 1.0 basis point to minus 0.145pc.

The 20-year and the 30-year yields stood flat at 0.255pc and 0.385pc, respectively.

The market was unfazed by a fall in domestic stocks amid worries about the news of first coronavirus death and signs of a potential rise in domestic infections in Japan.