February 14, 2017 / 6:25 AM / a year ago

Shorter-dated JGBs gain on firm 5-year sale, curve steepens

TOKYO, Feb 14 (Reuters) - Shorter-dated Japanese government bond prices edged higher on Tuesday as firm results at a five-year debt auction lifted sentiment, although longer-dated maturities sagged and steepened the overall yield curve.

The two-year yield fell 1 basis point to minus 0.225 percent and the five-year yield dipped half a basis point to minus 0.090 percent.

The benchmark 10-year yield rose 0.5 basis point to 0.090 percent and the 30-year yield climbed 3.5 basis points to 0.895 percent.

The bid-to-cover ratio, a gauge of demand, at Tueday’s 2.4 trillion yen ($21.18 billion) five-year auction rose to 4.26 from 3.66 at the previous sale last month.

The five-year JGBs have attracted firm demand, as highlighted by the record amount of the maturities the Bank of Japan lent to market participants at Tuesday’s regular operation.

On the other hand, super long 20-year and 30-year JGBs continued to underperform. While their yields were off the one-year highs reached early in February, concern towards the BOJ’s monetary policy stance have kept these maturities fragile. ($1 = 113.3200 yen) (Reporting by the Tokyo markets team; Editing by Simon Cameron-Moore)

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