October 29, 2019 / 4:34 AM / 18 days ago

JGB yields hit multi-month highs as prices slump on trade optimism

TOKYO, Oct 29 (Reuters) - Japanese government bond yields rose to the highest level in nearly three months and futures prices slumped on Tuesday as signs of progress toward a U.S.-China trade deal hurt demand for safe-haven assets.

Bond yields had been rising recently as investors scale back expectations for additional monetary easing at a Bank of Japan meeting ending Thursday.

Yields got a further boost after U.S. President Donald Trump said on Monday he expected to sign a significant part of the trade deal with China ahead of schedule.

Benchmark 10-year JGB futures dipped 0.13 point to 153.77, with a trading volume of 12,491 lots. At one point, futures fell to 153.64, their lowest since Aug. 1.

The 10-year JGB yield rose 1.5 basis points to minus 0.120%, the highest since July 17.

The 20-year JGB yield rose 1.5 basis points to 0.265%, the highest since June 14.

The 30-year JGB yield rose 2.5 basis points to 0.420%.

The two-year JGB yield rose 1.5 basis points to minus 0.205%. Earlier in the trading session, the two-year yield touched their highest level since Aug. 1.

Japan’s finance ministry auctioned two-year debt on Tuesday, which was met with strong demand from primary dealers.

The five-year yield rose 1.5 basis points to minus 0.240%. (Reporting by the Tokyo markets team, Editing by Sherry Jacob-Phillips)

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