Short-term JGBs edge higher as 2-year auction sees solid demand

• Benchmark 10-year JGB futures barely moved at 152.3, with a trading volume of 12,482 lots, while in the cash bond market, the 10-year JGB yield was unchanged at minus 0.005pc.
• The super-long zone moved in the opposite direction, with the 30-year JGB yield and the 40-year JGB yield gaining 1 basis point each to 0.480pc and 0.510pc, respectively.

TOKYO: Short-term prices of Japanese government bonds inched up on Thursday, buoyed by strong demand seen during the two-year debt auction.

Benchmark 10-year JGB futures barely moved at 152.3, with a trading volume of 12,482 lots, while in the cash bond market, the 10-year JGB yield was unchanged at minus 0.005pc.

The auction for 2 trillion yen of two-year debt on Thursday saw solid demand as the tail, the difference between the average and lowest accepted auction price, narrowed to 0.006 from 0.008 in the previous auction.

The bid-to-cover ratio, a gauge of demand, came in at 5.28.

At the shorter end of the yield curve, the two-year JGB yield dipped 2 basis points to minus 0.175pc, and the five-year yield inched down half a basis point to minus 0.135pc.

The super-long zone moved in the opposite direction, with the 30-year JGB yield and the 40-year JGB yield gaining 1 basis point each to 0.480pc and 0.510pc, respectively.

The 20-year JGB yield stood flat at 0.330pc.

On the Tokyo stock market, Japan's Nikkei stock index advanced to the highest since late February on hopes of a quick economic normalisation after coronavirus lockdowns.