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JGBs edge up on Europe debt worries, 2-yr yield hits 7-yr low
July 25, 2012 / 2:33 AM / 5 years ago

JGBs edge up on Europe debt worries, 2-yr yield hits 7-yr low

TOKYO, July 25 (Reuters) - Japanese government bond prices ticked up on Wednesday as Spain’s soaring bond yields fanned worries the country may need a full bailout and also on doubts Greece can meet the terms of its bailout.

* The benchmark 10-year JGB futures rose 7 ticks to 144.58 , a stone’s throw from a nine-year high of 144.64, though trade was slow with only 7,517 contracts traded by midday.

* The 10-year cash bond yield also fell 0.5 basis point to 0.725 percent, a near nine-year low of 0.720 percent hit earlier this week.

* “It seems to me that Greece is on course to leave the euro. I also doubt policymakers can handle Spain’s debt crisis well. The 10-year JGB yield is likely to fall below 0.65 percent in coming weeks,” said Takeo OKuhara, fund manager at Daiwa SB Investments.

* Spain paid the second highest yield on short-term debt since the birth of the euro at an auction and EU officials said Greece had little hope of meeting the terms of its bailout, casting fresh doubt on its future in the euro zone.

* The two-year yield fell to 0.09 percent, the lowest since July 2005, due to safe-haven buying from investors.

* The longer end of the yield curve underperformed ahead of a 20-year JGB auction on Thursday. The 30-year yield rose 1.0 basis point to 1.770 percent. (Reporting by Hideyuki Sano; Editing by Jacqueline Wong)

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