JGBs ease as safe-haven demand for debt fades on stronger equities

08 Jan, 2019

TOKYO: Japanese government bond (JGB) prices broadly slipped on Tuesday, weighed down by weaker U.S. Treasuries and as gains in equities dimmed the allure of safe-haven debt.

The yield on benchmark 10-year JGBs gained 2.0 basis points to zero percent, moving out of negative territory for the first time since Dec. 28, 2018.

Ten-year March JGB futures dipped 0.25 points to 152.45, with a trading volume of 26,465 lots by early afternoon trade.

The super-long zone followed suit, with the 20-year yield  tacking on 2.0 basis points to 0.490 percent, while the 30-year yield gained 1.5 basis point to 0.695 percent.

On the shorter end of the yield curve, the 5-year yield  rose 2.5 basis points to minus 0.150 percent, and the 2-year yield added 2.0 basis point to minus 0.150 percent.

The 2.2 trillion yen ($20.24 billion) 10-year JGB auction held on Tuesday attracted relatively weak demand, drawing bids 4.04 times the offer, lower than the average bid-to-cover ratio of 4.27 of the previous 10 auctions.

The lowest accepted price was in line with market expectations at 100.83.

On Monday, U.S. Treasury yields rose as investors evaluated the likelihood of further Federal Reserve rate hikes this year and as the United States and China resumed trade talks.

Copyright Reuters, 2019
 

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