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JGB firm, underpinned by solid 20-year sale
July 13, 2017 / 6:16 AM / 5 months ago

JGB firm, underpinned by solid 20-year sale

TOKYO, July 13 (Reuters) - Japanese government bonds strengthened on Thursday, bolstered by solid demand at a 20-year JGB sale and underpinned by lower Treasury yields after remarks by the head of the U.S. Federal Reserve were not as hawkish as some had expected.

The 10-year cash JGB yield edged down half a basis point to 0.080 percent, while the September 10-year JGB futures contract was up 0.15 point at 150.03.

In the superlong zone, the 20-year JGB yield was down 2.5 basis points at 0.600 percent, and the 30-year JGB yield shed 3.5 basis points to 0.855 percent.

At the Ministry of Finance’s sale of 1 trillion yen ($8.85 billion) of 20-year JGBs with a 0.60 percent coupon, some 34.8784 percent of the bids were accepted at the lowest price of 99.80.

The sale drew bids of 4.19 times the amount offered, up from the previous sale’s bid-to-cover ratio of 3.98 times.

JGBs market sentiment also got a lift from firmer U.S. Treasuries, which rose after Fed Chair Janet Yellen’s testimony to Congress tempered investors’ expectations for an interest rate hike later this year.

The benchmark 10-year U.S. Treasury yield stood at 2.312 percent in Asian trading, below its close on Wednesday of 2.327 percent.

$1 = 113.0200 yen Reporting by Tokyo markets team; Editing by Sunil Nair

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