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  1. JGBs slip as investors’ risk appetite returns

JGBs slip as investors’ risk appetite returns

Japanese government bonds slipped on Monday, as risk appetites were strengthened by opinion polls showing British voters have swung and now favour remaining in the European Union.

By: | Tokyo | Published: June 20, 2016 12:22 PM
Japanese government bonds (JGBs), Japanese government bonds news, Japanese government bonds updates, Bank of Japan The longer zone faced the brunt of Monday’s selling after the Bank of Japan bought only shorter maturities in its asset purchase operations. (Reuters)

Japanese government bonds slipped on Monday, as risk appetites were strengthened by opinion polls showing British voters have swung and now favour remaining in the European Union.

The longer zone faced the brunt of Monday’s selling after the Bank of Japan bought only shorter maturities in its asset purchase operations, though losses were pared in the afternoon as some investors bought on dips, market participants said.

The 20-year yield added 2.5 basis points to 0.190 , down from a session high of 0.215 percent but still solidly above last week’s record low of 0.090 percent.

The 30-year yield rose 3.5 basis points to 0.265 percent , after rising as high as 0.300 percent earlier. It had marked a record low of 0.150 percent on Thursday.

The BOJ offered to buy 450 billion yen ($4.30 billion) of JGBs in the 5- to 10-year zone and 70 billion yen of JGBs maturing within one year.

Three of six opinion polls published over the weekend showed a shift towards keeping Britain in the EU ahead of Thursday’s referendum.

The improved mood weakened the perceived safe-haven yen and sent the Nikkei stock index up 2.3 percent, sapping the appeal of fixed-income assets and pushing up yields.

The benchmark 10-year JGB yield edged up half a basis point to minus 0.150 percent, well above a record low of minus 0.210 percent plumbed on Thursday against a backdrop of growing “Brexit” fears.

June 10-year futures ended up 0.02 point at 152.27.

JGBs had a muted reaction to Japanese trade data released early in the session that showed exports fell at the fastest pace in four months in May on supply chain disruptions from the Kumamoto earthquake and slow growth in emerging markets.

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