October 13, 2016 / 5:00 AM / a year ago

Longer dated JGBs gain on BOJ buying, firm 30-year sale

TOKYO, Oct 13 (Reuters) - Longer dated Japanese government bond prices rose on Thursday, with the Bank of Japan’s regular debt-buying operation and follow-through support from a firm 30-year auction shoring up the market.

The gains in the JBGs were limited, however, as investors were cautious following the recent rise in U.S. Treasury yields.

The benchmark 10-year JGB yield was unchanged at minus 0.065 percent, while the 20-year yield fell 1 basis point to 0.370 percent.

The 30-year yield declined 1.5 basis points to 0.485 percent.

Super long JGB yields fell after the 30-year auction on Wednesday attracted steady investor demand. The maturity is one of the few remaining on the curve that offer positive yields to investors.

Signs of the market settling down after the BOJ’s decision last month to begin controlling the yield curve also boded well for the 30-year sale.

The 10-year U.S. Treasury note yield rose to a four-month high of 1.80 percent overnight on fresh supply and reinforced expectations of a rate hike by the Federal Reserve later this year. The yield pulled back slightly to 1.737 percent on Thursday. (Reporting by the Tokyo markets team; Editing by Shri Navaratnam)

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