January 15, 2020 / 6:30 AM / 13 days ago

JGBs supported by trade-deal caution, 5-year auction

TOKYO, Jan 15 (Reuters) - Japanese government bond (JGB) prices on Wednesday were supported by comments from a top U.S. official that current tariffs on Chinese goods would stay for now after the signing of a preliminary trade deal expected later in the day.

Solid results of a five-year JGB auction held on Wednesday also underpinned the market.

Benchmark 10-year JGB futures rose 0.12 point to 151.88, with a trading volume of 22,021 lots. In the cash bond market, the 10-year JGB yield fell 0.5 basis point to 0.005%.

The 20-year JGB yield was flat at 0.305%, while the 30-year yield rose 0.5 basis point to 0.455%.

JGBs have found support as top U.S. trade officials said there was no agreement in place with China on further tariff reductions.

The deal terms would be announced at 1600 GMT (11:30 am EST), when Trump and Chinese Vice Premier Liu He are slated to sign the agreement.

The five-year yield fell 0.5 basis point to minus 0.095% after the five-year JGB auction attracted solid bids.

The tender drew bids of 4.48 times the offer, higher than 4.02 times in the previous five-year JGB auction last month. The tail, or the gap between lowest and average prices, shrank to zero from 0.08 last time in another sign of strong demand. (Reporting by Tokyo Markets Team, Editing by Sherry Jacob-Phillips)

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