Bonds News

JGB futures rise on stalled vaccine trial, U.S. stimulus concerns

TOKYO, Oct 14 (Reuters) - Japanese government bond futures edged higher on Wednesday as investors were concerned over a stalled high-profile COVID-19 vaccine trial and a lack of agreement on additional U.S. fiscal stimulus.

Benchmark 10-year JGB futures rose 0.02 point to 151.96, with a trading volume of 14,347 lots, while the 10-year JGB yield was flat at 0.025%.

In the super-long zone, the 20-year JGB yield rose half a basis point to 0.410%, while the 40-year JGB yield lost half a basis point to 0.670%.

The 30-year JGB yield was unchanged at 0.640%.

At the shorter end of the market, the two-year JGB yield rose 1 basis point to minus 0.135%, while the five-year yield inched up half a basis point to minus 0.105%.

Risk sentiment took a hit after Johnson & Johnson halted a COVID-19 vaccine trial and Eli Lilly and Co paused an antibody treatment trial over safety concerns.

Meanwhile, as stimulus talks stalled, hopes for a new U.S. coronavirus relief package faded, weighing on investor sentiment.

Back home, the Nikkei newspaper reported on Tuesday that Japan’s Prime Minister Yoshihide Suga would order his government to compile extra economic stimulus measures as early as November.

The government could decide in late December on a draft of a third extra budget to fund the expected measures, when it draws up plans for next fiscal year’s budget, Nikkei said.

The Bank of Japan maintained the size of its bond purchase in its operation on Wednesday, buying one- to three-year JGBs and five- to ten-year notes worth 420 billion yen each, and 350 billion yen of three- to five-year bonds. (Reporting by Tokyo Markets Team; Editing by Arun Koyyur)