February 14, 2018 / 4:22 AM / in a year

JGBs gain as Japan equities tumble, yield curve flattens

TOKYO, Feb 14 (Reuters) - Japanese government bond prices gained on Wednesday as tumbling domestic equities enhanced demand for safe-haven debt.

The yield curve flattened as super-long maturities outperformed, thanks to demand from institutional investors like life insurers and pension funds gearing up for the end of the domestic fiscal year that runs through March.

The benchmark 10-year JGB yield dipped 0.5 basis point to 0.060 percent while the 30-year yield declined 1 basis point to 0.785 percent.

The 40-year yield was down 1 basis point at 0.920 percent, its lowest since January 2017.

Wednesday’s 2.2 trillion yen ($20.58 billion) five-year JGB auction attracted ample demand amid weakening equities.

The bid-to-cover ratio, a gauge of demand, at the five-year sale was 4.67, compared to 4.3, the average ratio of the past 10 auctions.

The Nikkei retreated to a four-month low as investor sentiment remained shaky ahead of U.S. inflation data due later in the day. ($1 = 106.8900 yen) (Reporting by the Tokyo markets team; Editing by Sunil Nair)

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