August 23, 2018 / 4:38 AM / in 2 months

JGBs slip as equities extend gains

TOKYO, Aug 23 (Reuters) - Japanese government bond prices inched lower as Tokyo stocks extended gains and kept safe-haven debt on the backfoot.

The losses in JGBs were limited, however, as a liquidity-enhancing auction attracted ample investor demand.

The benchmark 10-year JGB yield rose half a basis point to 0.095 percent, while the 30-year yield also climbed half a basis point to 0.845 percent.

The finance ministry on Thursday offered to sell 600 billion yen ($5.43 billion) of off-the-run JGBs with remaining maturities of five- to 15.5 years. The ministry regularly conducts such sales in an attempt to provide the market with liquidity.

The auction bid-to-cover ratio, a gauge of demand, dipped slightly to 3.11 from 3.44, the average from the past 10 sales.

Dealers consider a ratio above 3 as satisfactory and the auction was seen to have drawn short-covering demand from investors looking to replenish their inventories.

Japan’s Nikkei was up 0.2 percent, supported by the yen’s weakening against the dollar. The Nikkei was headed for its third session of gains. ($1 = 110.4900 yen) (Reporting by the Tokyo markets team; Editing by Sunil Nair)

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