Most JGBs gain after decent 10-year debt auction

TOKYO, May 12 (Reuters) – Japanese government bond prices mostly edged higher on Tuesday as an auction of ten-year JGBs saw decent results despite weakening demand.

The 2.1 trillion yen auction of ten-year JGBs on Friday drew the bid-to-cover ratio to 4.09, down from 4.19 in April. However, this was still above 2.0, a ratio generally considered satisfactory by dealers.

Following the auction result, benchmark 10-year JGB futures nudged higher by 0.11 point to 152.31, with a trading volume of 14,044 lots.

The key 10-year cash JGB yield fell 1.5 basis points to minus 0.010%.

In the super-long zone, the 30-year JGB yield fell 2 basis points to 0.455%, while the 40-year JGB yield fell 1.5 basis points to 0.465%.

At the shorter end of the market, the five-year yield fell 0.5 basis point to minus 0.125%, while the two-year JGB yield rose 0.5 basis point to minus 0.170%.

Bank of Japan governor Haruhiko Kuroda reiterated his message on Tuesday that the BOJ’s JGBs purchase was aimed at stabilising the bond market. He also said the bank promises it will “absolutely not” create a situation where its unlimited bond buying would trigger unwelcome levels of inflation. (Reporting by Eimi Yamamitsu; Editing by Devika Syamnath)

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