April 13, 2017 / 4:21 AM / in 3 months

JGB yields probe multi-month lows, tracking U.S. Treasuries

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TOKYO, April 13 (Reuters) - The benchmark 10-year Japanese government bond yield edged down on Thursday to its lowest level since November and within a whisper of zero, taking its cues from lower U.S. Treasury yields and underpinned by solid demand at a 30-year JGB auction.

The benchmark 10-year JGB yield fell one basis point to 0.005 percent, while 10-year JGB futures were up 0.19 point in afternoon trade at 151.09.

The U.S. benchmark yield approached five-month lows on Wednesday, prompted by comments by U.S. President Donald Trump on favouring low interest rates made in a newspaper interview published in late U.S. trading. It continued to slip in Asian trading, and last stood at 2.228 percent, down from the U.S. close of 2.296 percent.

On Thursday, Japan's Ministry of Finance offered 800 billion yen ($7.35 billion) of 30-year JGBs with a 0.8 percent coupon, and 98.5832 percent of the bids accepted at the lowest price of 100.05.

The sale drew bids 3.08 times the amount offered, down from the previous sale's bid-to-cover ratio of 3.14 times but still solid. The tail - the gap between the average and lowest accepted prices - narrowed to 0.07, compared with that of last month's offering at 0.19, indicating stronger demand for the bonds.

The outcome bolstered the superlong tenor, with 30-year yield slipping 3.5 basis points to 0.775 percent, its lowest since late January. The 20-year yield fell 1.5 basis points to 0.570 percent after falling to 0.565 percent earlier, its lowest since late December. ($1 = 108.8000 yen) (Reporting by Tokyo markets team; Editing by Sam Holmes)

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