April 19, 2018 / 4:08 AM / a month ago

JGBs slip as stocks extend gains, 20-year bond auction well received

TOKYO, April 19 (Reuters) - Japanese government bond prices slipped on Thursday with the debt market coming under pressure as domestic equities extended gains to reach seven-week highs.

The five-year JGB yield rose half a basis point to minus 0.110 percent.

The benchmark 10-year yield added half a basis point to 0.035 percent and the 30-year yield was also half a basis point higher at 0.700 percent.

The Nikkei climbed 0.3 percent, with investors relieved that no new U.S. demands on trade came out of this week’s summit between Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump.

JGBs were also weighed down by the drop in U.S. Treasuries, with longer-dated debt prices falling and pushing the 10-year note yield to one-month highs.

Faced by such headwinds, Thursday’s one-trillion yen ($9.31 billion) 20-year JGB auction drew ample, but not spectacular, investor demand.

The bid-to-cover ratio, a gauge of demand, at the 20-year auction slipped to 3.69 from 4.47 at the previous sale in March. Dealers generally consider a ratio above 2.0 as satisfactory.

$1 = 107.3800 yen Reporting by the Tokyo markets team; Editing by Sunil Nair

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