TOKYO, Sept 13 Superlong Japanese government
bonds mostly edged up on Tuesday, getting a lift after decent
demand at a 20-year JGB auction.
While the outcome wasn't as strong as last month's 20-year
sale, it was better than the worst fears of traders fretting
about weak demand as speculation swirls that the Bank of Japan
could change its policy stance as early as next week.
"It's hard to buy 20-year bonds right now, ahead of the BOJ.
It's hard to buy anything," said a credit trader at a Japanese
The central bank is studying several options to steepen the
bond yield curve when it meets next week, sources familiar with
its thinking said. That has fueled fears the BOJ may signal a
tapering of its massive bond purchases or take short-term rates
deeper into negative territory
The 20-year JGB yield shed 1 basis point to 0.445 percent
, down from its earlier session high of 0.475
The Ministry of Finance offered 1.1 trillion yen ($10.80
billion) of 20-year JGBs with a 0.5 percent coupon.
The notes sold at the lowest price of 101.05, drawing bids
of 3.33 times the amount offered, modestly down from the
previous sale's bid-to-cover ratio of 3.87 times.
The tail between the average and lowest accepted prices also
widened to 0.10, compared with that of last month's offering at
0.03, indicating slightly weaker demand for the bonds.
September 10-year futures ended up 0.03 point at
151.48. Futures turned higher immediately after the auction
results but then curbed those gains.
The 30-year JGB yield shed 2.5 basis point to 0.510 percent
, pulling away from the previous session's high of
0.555 percent, which was its loftiest peak since late March.
The benchmark 10-year yield edged up half a basis point in
late afternoon trade to minus 0.015 percent,
while the 5-year yield was flat at minus 0.175
($1 = 101.8900 yen)
(Reporting by Tokyo markets team; Editing by Kim Coghill)