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  1. JGBs mostly firm, super long yields plumb record lows

JGBs mostly firm, super long yields plumb record lows

Japanese government bond yields hit record lows on Thursday, with the superlong zone outperforming even after the Bank of Japan decided not to expand its massive stimulus programme.

By: | Tokyo | Published: June 16, 2016 4:51 PM

Japanese government bond yields hit record lows on Thursday, with the superlong zone outperforming even after the Bank of Japan decided not to expand its massive stimulus programme.

The 10-year JGB yield fell to minus 0.205 percent , after plumbing a record low of minus 0.210 before the BOJ’s announcement.

June 10-year futures ended nearly flat, down 0.01 point at 152.73.

The 5-year yield added 1 basis point to minus 0.285 percent after hitting a record low of minus 0.305 percent earlier.

Prices in the superlong zone initially pared gains after the BOJ, but then extended them in the late afternoon, with the 20-year yield down 4.5 basis points at a record low 0.095 percent and the 30-year yield down 5.5 basis point at record low 0.150 percent.

Also Read: SAIL urges government to review trade pacts with Japan, Korea

The BOJ held monetary policy steady as expected at the conclusion of its two-day meeting, lifting the yen and sending Tokyo stocks down 2 percent.

The central bank maintained the negative interest rate policy adopted in February, which has pushed yields on most JGBs below zero. Most economists, however, still believe it will ease policy further at its meeting in late July, by ramping up asset purchases or putting rates deeper into negative territory.

JGB prices got a lift from higher U.S. Treasuries overnight, in the wake of the U.S. Federal Reserve’s move to hold policy steady and cut its economic growth expectations.

Also pressuring JGB yields, German 10-year government bond yields fell below zero for the first time earlier this week, amid growing fears that Britain will vote to leave the European Union in a June 23 referendum.

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