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JGBs track Treasuries lower, longer dated bonds sag after surge
April 18, 2017 / 4:42 AM / 9 months ago

JGBs track Treasuries lower, longer dated bonds sag after surge

TOKYO, April 18 (Reuters) - Japanese government bond prices fell across the board on Tuesday as the market tracked a broad retreat by U.S. Treasuries.

The benchmark 10-year JGB yield was up 1 basis point at 0.010 percent after rising to as high as 0.015 percent as prices eased. The 30-year yield climbed 2.5 basis points to 0.760 percent, after hitting a three-month low of 0.735 percent on Monday.

An auction of five-year JGBs drew sufficient demand after the finance ministry reduced their issuance amount to 2.2 trillion yen ($20.2 billion) from 2.4 trillion yen and tightened supply. The bid-to-cover ratio, a gauge of demand, at Tuesday’s auction rose to 3.28 from 2.86 at the previous sale in March.

But another measure of demand showed that five-year JGBs may have become too expensive for some buyers following the recent fall in their yields to five-month lows as prices rose.

The tail, the difference between the lowest and average accepted auction prices, was unchanged at a relatively wide 0.04. A shorter tail generally indicates stronger demand.

U.S. Treasury yields rose from five-month lows on Monday as Wall Street shares gained, reducing demand for safe-haven debt.

$1 = 108.9100 yen Reporting by the Tokyo markets team

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