September 18, 2019 / 5:45 AM / 2 months ago

JGB yields drop after 20-yr debt auction; focus on cenbanks' outcome

TOKYO, Sept 18 (Reuters) - Japanese government bond (JGB) yields dropped on Wednesday after a 20-year debt auction attracted demand, while investors awaited cues on monetary policy from the U.S. Federal Reserve and the Bank of Japan.

Benchmark 10-year JGB futures rose 0.24 point to 154.19, with a trading volume of 23,938 lots by late afternoon trade.

The 10-year cash JGB yield dropped 1.5 basis points to minus 0.170%, after touching a seven-week high of minus 0.150% earlier in the day.

In the super-long zone, the 20-year and the 30-year yields fell half-a-basis point each to 0.205% and 0.345%, respectively, while the 40-year yield fell 1 basis point to 0.370%.

The U.S. Fed is expected to cut rates by 25 basis points when it concludes its two-day meeting later on Wednesday, with investors focusing on the so-called “dot plot,” which shows where policymakers expect rates to be in the future.

The BOJ meets on Thursday, and the latest Reuters poll suggests the central bank will keep its policy on hold.

However, at least 28 of 41 economists expect it will ease its policy this year and 13 believe it may surprise by taking action at the Thursday meeting. (Reporting by Tokyo Markets Team; Editing by Sherry Jacob-Phillips)

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