JGBs mixed, 20-year yield hits record low as superlongs outperform

05 Jul, 2016

TOKYO: Benchmark Japanese government bonds slipped on Tuesday but inched off session lows after a solid 10-year auction, while strength in the superlong zone shaved the 20-year yield down to a record low.

The Ministry of Finance offered 2.4 trillion yen ($23.50 billion) of 10-year JGBs with a 0.10 percent coupon.

The notes sold at a lowest price of 103.47, and drew bids of 3.64 times the amount offered, indicating solid demand though falling a bit short of the previous sale's bid-to-cover ratio of 4.11 times.

The tail between the average and lowest accepted prices was a narrow 0.03, compared with that of last month's offering at 0.02, indicating demand remained strong for the bonds.

The 10-year yield was up half a basis point at minus 0.250 percent, after earlier rising as high as minus 0.240 percent. It remained not far from its recent record low of minus 0.260 percent.

The 20-year JGB yield fell to a record low of 0.030 percent after the auction results, before inching back to 0.035 percent, down half a basis point on the day.

The 30-year JGB yield shed 2 basis points to 0.055 percent .

September 10-year futures ended down 0.03 point at 153.31, moving away from their record high of 153.53 touched on Monday.

Copyright Reuters, 2016

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