TOKYO, Sept 6 Japanese government bonds rose off
earlier lows on Tuesday after the results of a 30-year JGB
auction showed solid demand for longer maturities.
The 30-year JGB outperformed, its yield falling 1.5 basis
points to 0.505 percent after rising as high as
The Ministry of Finance offered 800 billion yen ($7.71
billion) of 30-year JGBs with a 0.5 percent coupon.
The notes sold at the lowest price of 99.80, drawing bids of
3.13 times the amount offered, improving from the previous
sale's bid-to-cover ratio of 3.07 times.
The tail between the average and lowest accepted prices
narrowed to 0.18, compared with that of last month's offering at
0.21, indicating stronger demand for the bonds.
The benchmark 10-year yield rose 1.5 basis points to minus
0.010 percent, while September 10-year futures
were down 0.09 point at 151.09 in afternoon trading.
Some investors believe it is a matter of time before the
10-year yield nudges back into positive territory, where it
would likely meet buying interest from Japanese institutions.
"There are decent buyers around zero percent, for the
10-year," said Keiko Onogi, a senior JGB strategist at Daiwa
On Monday, Bank of Japan Governor Haruhiko Kuroda signalled
Japan's central bank was ready to further expand its already
massive stimulus, but he disappointed investors hoping for a
more explicit hint about what the BOJ will do at its next review
on Sept. 20-21.
"I think the sentiment is getting better, maybe in reaction
to Kuroda's speech yesterday. I see some effect on the long end
of the curve," Daiwa's Onogi said, to explain the solid auction
BOJ board member Makoto Sakurai told Reuters last week that
policymakers will likely focus on refining current policy steps
and consider ways to fix a bond yield curve that has flattened
too much as a result of its negative interest rate policy.
($1 = 103.7000 yen)
(Reporting by Tokyo markets team; Editing by Richard Borsuk)