February 12, 2016 / 5:01 AM / 2 years ago

JGBs slip on profit taking, yields pull away from record lows

TOKYO, Feb 12 (Reuters) - Japanese government bond prices slipped on Friday as profit taking emerged after a volatile week that saw debt yields sink to record lows.

The benchmark 10-year JGB yield was up 6 basis points at 0.065 percent.

The 10-year yield had dropped to an all-time low of minus 0.035 percent earlier in the week as global flight-to-quality added to the downward pressure exerted from the Bank of Japan’s negative interest rate policy. Bond yields had declined steadily after the BOJ adopted negative rates on Jan. 29.

Mediocre demand at Friday’s liquidity-enhancing auction, under which the Ministry of Finance sells existing JGB issues to the market, also helped cool sentiment.

But underscoring the powerful gravitational pull under the BOJ’s super easy monetary policy, the five-year yield remained firmly below zero. The five-year yield was last up 6 basis points at minus 0.165 percent after hitting a record low of minus 0.265 percent on Wednesday. (Reporting by the Tokyo markets team; Editing by Simon Cameron-Moore)

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