February 13, 2018 / 6:55 AM / 9 days ago

JGBs steady to firmer on weak stocks, year-end buying

TOKYO, Feb 13 (Reuters) - Japanese government bond prices were steady to slightly firmer on Tuesday, supported by a fall in domestic shares and buying ahead of the end of the financial year next month.

The 10-year JGB futures price rose 0.06 point to 150.56 while the yield on the cash benchmark 10-year JGBs stood flat at 0.065 percent.

The 20-year yield fell 1.0 basis point to 0.570 percent while the 30-year yield dropped 0.5 basis point to 0.800 percent, a two-month low.

The 40-year yield dropped 1.5 basis points to one-year low of 0.925 percent.

Some Japanese life insurers and pension funds, many of who have been reluctant to buy JGBs due to their low yields, are said to have bought long-dated bonds to rebuild their position ahead of the end of the current financial year on March 31.

Japanese shares erased earlier gains and plunged to four-month lows in a sign investors were hardly convinced if the worst was over in a stock sell-off that began late last month on worries about higher U.S. inflation and interest rates.

This raised the chances that the Bank of Japan will keep the current stimulus longer before seeking an exit from it, helping to underpin JGBs. (Reporting by Tokyo Markets Team; Editing by Vyas Mohan)

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