July 20, 2018 / 5:33 AM / in 3 months

JGBs gain on strong auction, China yuan worries

TOKYO, July 20 (Reuters) - Japanese government bond prices gained on Friday following strong results at an auction of short-dated bonds and on worries about a fall in the Chinese yuan and further disruptions to the Chinese economy.

The auction of 400 billion yen ($3.56 billion) of JGBs with one to five years to maturity attracted strong bids. In the so-called liquidity-enhancing auction, the ministry is re-offering additional amount of existing JGBs.

The average yield was 0.3 basis points below the previous close.

Japan’s Nikkei share average dropped 0.5 percent as the Chinese yuan extended losses to hit its lowest level in more than a year on worries about Sino-U.S. trade wars.

Ten-year JGB futures rose 0.04 point to 150.98, edging near this month’s high of 150.01.

The 10-year JGB yield fell 0.5 basis point to 0.030 percent, near its three-month low of 0.025 percent touched earlier this month.

The 20-year JGB yield was flat at 0.480 percent while the 30-year JGB yield rose 0.5 basis point to 0.685 percent.

$1 = 112.25 yen Reporting by Tokyo Markets Team; Editing by Sunil Nair

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