Business & Finance

JGBs dip as risk aversion eases; yield curve flattens

Published Updated

Ten-year JGB futures dipped 0.03 point to 142.89 while the 10-year bond yield rose 1.0 basis point to 0.970 percent, off a one-year low of 0.960 percent struck on Thursday.

Investors are becoming cautious about chasing JGBs higher, remembering that the fall in the 10-year yield to a seven-year low of 0.82 percent last November was followed by four months of a painful bear market.

The longer end of the market continued to benefit from relief after Thursday's 40-year JGB auction drew strong demand.

The 30-year bond yield fell 1.5 basis points to 1.910 percent, while the 20-year bond yield fell 0.5 basis point to 1.710 percent.

The spread between 10- and 30-year yields tightened to 94 basis points from eight-month high of 99 basis points, hit before the auction.

Copyright Reuters, 2010