May 1, 2020 / 6:51 AM / a month ago

JGBs fall after tepid auction results, traders adjust positions

TOKYO, May 1 (Reuters) - Japanese government bond prices fell on Friday as market players adjusted their positions ahead of a long holiday, while a liquidity-enhancing auction showed weak investor demand.

The Ministry of Finance auctioned on Friday around 400 billion yen ($3.74 billion) of JGBs, one to five years to maturity, in an attempt to enhance market liquidity.

The bid-to-cover ratio, an indication of demand, came in at 3.29, a sharp fall from the previous auction’s 4.32.

Japanese markets will be closed next week until Thursday for the Golden Week holidays.

“We never know what could happen during the Golden Week,” said Tadashi Matsukawa, head of fixed income investment at PineBridge Investments in Tokyo.

“Usually the yen tends to rise, and if there’s a dollar-yen dip, the Bank of Japan will change its measures.”

Benchmark 10-year JGB futures fell 0.18 point to 152.61, with a trading volume of 8,136 lots.

The 10-year JGB yield rose 1 basis point to minus 0.030%.

The two-year JGB yield rose 2 basis points to minus 0.165% and the five-year yield climbed 1.5 basis points to minus 0.145%.

In the superlong zone, the 20-year JGB yield rose 1 basis point to 0.310%, while the 30-year JGB yield stayed flat at 0.425%.

($1 = 107.0900 yen)

Reporting by Eimi Yamamitsu, Editing by Sherry Jacob-Phillips

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