July 25, 2019 / 4:27 AM / 4 months ago

JGBs rise as weak euro zone data supports global monetary easing

TOKYO, July 25 (Reuters) - Japanese government bond prices rose on Thursday as weak economic data from the euro zone bolstered expectations that the European Central Bank will join other major central banks in easing monetary policy.

At a policy meeting later on Thursday, ECB President Mario Draghi is expected to signal the central bank’s intention to lower interest rates from as early as September.

European and U.S. bond yields came under pressure on Wednesday after data showed Germany’s manufacturing sector contracted at the fastest pace in seven years while French business growth unexpectedly slowed.

Ten-year JGB futures rose 0.05 point to 153.73, with a trading volume of 11,305 lots.

The 10-year JGB yield fell 0.5 basis point to minus 0.155%.

At the short end of the curve, two-year JGB yields fell 0.5 basis point to minus 0.210%. Earlier on Thursday, Japan’s finance ministry auctioned 2-year government debt, which drew stronger demand than the previous auction in June.

The five-year JGB yield fell 0.5 basis point to minus 0.24%.

At the long end, the 20-year JGB yield fell 1 basis point to 0.210%, while the 40-year JGB yield declined 1 basis point to 0.390%. (Reporting by the Tokyo Markets Team; Editing by Subhranshu Sahu)

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