August 10, 2018 / 7:11 AM / a month ago

JGBs gain; drop in Turkish lira prompts risk aversion

TOKYO, Aug 10 (Reuters) - Japanese government bonds gained on Friday as the Turkish lira hit a new record low against the U.S. dollar, triggering broad risk aversion and prompting investors’ flight-to-quality buying in government bonds.

Ten-year JGB futures firmed 0.20 point to 150.27, their biggest daily gains since Aug. 2, with a trading volume of 34,467 lots.

The benchmark 10-year JGB yield and the 20-year yield fell 1 basis point each to 0.100 percent and 0.610 percent, respectively.

The 30-year JGB yield eased one basis point to 0.840 percent, slipping further from Wednesday’s 0.860 percent, its highest level since early November.

The Turkish lira tumbled more than 10 percent on Friday to a record low of 6.4915 against the dollar on concerns over a widening rift with the United States, sending the euro and equities lower and buoying safe haven assets.

Japan’s economy grew more than expected in the second quarter, government data showed on Friday, but the market reaction was muted. (Reporting by Tokyo Markets Team; Editing by Sherry Jacob-Phillips)

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