November 13, 2018 / 4:34 AM / a month ago

Longer-dated JGBs firm as equities fall, boost safe-haven allure

TOKYO, Nov 13 (Reuters) - Japanese government bond (JGB) prices edged up on Tuesday as the benchmark Nikkei share average hit a two-week low in intra-day trade, weighing on risk appetite and boosting the safe-haven appeal of debt.

That, in turn, pushed yields on longer-dated JGBs lower, helping to flatten the yield curve.

Ten-year December JGB futures edged down 0.01 point to 150.74 while the yield on benchmark 10-year JGBs was flat at 0.115 percent.

The 20-year JGB yield and 30-year JGB yield edged down 0.5 basis point each, to 0.650 percent and 0.875 percent, respectively.

The 40-year JGB yield dropped 1.0 basis point to 1.030 percent.

An auction of 700 billion yen ($6.16 billion) 30-year JGBs drew solid demand on Tuesday.

The bid-to-cover ratio, a gauge of demand, came in at 3.99 percent, slightly higher than the bid-to-cover ratio of 3.92 percent from the previous auction.

The auction drew strong demand even after the Bank of Japan (BOJ) last month unveiled it will seek to avoid buying most JGB maturities on the day immediately after they have been sold at this month’s auctions.

Central bank data released on Tuesday showed the BOJ became the first among G7 nations to own assets collectively worth more than the country’s entire economy.

The data showed the BOJ held 553.6 trillion ($4.87 trillion) of total assets.

$1 = 113.7100 yen Reporting by Tokyo Markets team; Editing by Simon Cameron-Moore

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