JGBs drop, benchmark yield rises to highest since Sept 2014

11 Jun, 2015

TOKYO: Japanese government bond prices dropped on Thursday, pressured by falls in Treasuries and Bunds, sending the benchmark JGB yield to its highest level since September 2014.

The 10-Year JGB yield rose 4 basis points to 0.535 percent, after earlier rising as high as 0.545 percent.

The results of the Ministry of Finance's auction of 20-year JGBs was largely in line with expectations, though some market participants had been expecting stronger demand due to recently high yields.

The ministry sold 1.0891 trillion yen of 20-year JGBs with a 1.3 percent coupon, at a lowest accepted price of 100.00. The bid-to-cover ratio declined to 2.56 from 2.91 at last month's sale, while the tail between the average and lowest accepted prices widened slightly to 0.11 from the previous 0.10.

The 20-year yield rose 3.5 basis points to 1.280 percent, after earlier rising as high as 1.295 percent, while the 30-year yield added 1.5 basis point to 1.500 percent after hitting an intraday high of 1.525 percent.

The 10-year JGB futures price fell 0.41 point to end at 145.95, its lowest close since November 2014.

Copyright Reuters, 2015

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