June 20, 2018 / 5:03 AM / 6 months ago

JGBs dip as risk aversion settles for now, BOJ buying curbs losses

TOKYO, June 20 (Reuters) - Japanese government bond prices dipped on Wednesday as risk aversion stemming from the U.S.-China trade row that shook the financial markets seems to have settled for now, prompting a bounce in Tokyo shares.

The five- and 10-year JGB yields rose half a basis point to minus 0.115 percent and 0.030 percent , respectively.

The 20-year yield was also up 0.5 basis point, at 0.500 percent.

A scheduled debt-buying operation conducted by the Bank of Japan helped curb JGB losses.

The BOJ on Wednesday offered to buy 690 billion yen ($6.27 billion) of five- to 40-year JGBs as part of its bond-buying scheme.

The Nikkei index rose 0.5 percent after sliding 1.7 percent on Tuesday as U.S. President Donald Trump threatened to slap more tariffs on China, prompting an angry response from Beijing.

“The financial markets’ response to these events are becoming limited, reflecting stable growth in the global economy,” wrote Chotaro Morita, chief rates strategist at SMBC Nikko Securities.

“But once the global stock markets begin envisioning the long-term implications of a trade conflict, we could see a much more pronounced response sending long-term yields lower across the board.” ($1 = 110.1200 yen) (Reporting by the Tokyo markets team Editing by Eric Meijer)

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