JGBs slip, taking cues from overseas markets

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Tokyo | Published: September 9, 2016 12:38:20 PM

Japanese government bonds slipped on Friday, taking cues from higher yields overseas, while the yield curve steepened as longer maturities underperformed.

Japanese government bondsThe 20-year yield rose 5 basis points to a five-month high of 0.435 percent, while the 30-year JGB yield added 7 basis points to 0.515 percent. (Reuters)

Japanese government bonds slipped on Friday, taking cues from higher yields overseas, while the yield curve steepened as longer maturities underperformed.

The 20-year yield rose 5 basis points to a five-month high of 0.435 percent, while the 30-year JGB yield added 7 basis points to 0.515 percent.

The benchmark 10-year yield was up 2.5 basis points at minus 0.015 percent, while September 10-year futures ended down 0.18 point at 151.13.

U.S. Treasury yields rose across the board on Thursday, in line with European bonds, after European Central Bank President Mario Draghi left the door open for additional monetary policy easing but gave no indication that more stimulus was actually coming.

The Bank of Japan bought only shorter zones in its buying operations earlier on Friday. The central bank offered to buy 70 billion yen of JGBs maturing in one year, 400 billion yen of 1- to 3-year JGBs, and 420 billion yen of 3- to 5-year JGBs in its asset purchase programme.

Also weighing on the superlong zone was news that Japan’s Ministry of Finance is considering raising the amount of 40-year JGBs sold at each auction to 500 billion yen from the current level of 400 billion yen, according to a senior ministry official.

The MOF floated the plan in a meeting with JGB primary dealers on Thursday, and will make a formal decision after meeting with JGB investors on Friday, the official said.

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