TOKYO Oct 6 Japanese government bonds edged
down on Thursday, after upbeat economic data lifted U.S.
Treasury yields in the previous session.
The benchmark 10-year JGB yield crept up 0.5 basis point
(bp) to minus 0.060 percent.
December 10-year futures ended down 0.06 point at
152.00, the same level at which they opened in the morning.
U.S. Treasury yields rose overnight after the Institute of
Supply Management's reading on U.S. services sector activity
rebounded to an 11-month high in September, while its employment
index was also the highest since October 2015. That raised hopes
for the key nonfarm payrolls report, to be released on Friday,
even after separate data showed private sector hiring fell short
of economists' expectations.
The 20-year JGB yield also added 0.5 bp to 0.385 percent
, while in shorter maturities, the 2-year yield
rose 1 bps to minus 0.275 percent.
The Bank of Japan introduced a new policy last month of
controlling the yield curve, guiding the 10-year yield around
zero percent as it pushes down short- to medium-term borrowing
costs while allowing super-long yields to rise.
BOJ Governor Haruhiko Kuroda told the upper house budget
committee on Thursday that he does not expect the central bank
will run out of government bonds to purchase for its
quantitative easing programme.
Kuroda also said the BOJ is prohibited from directly
underwriting government debt and that the BOJ conducts all its
debt purchases in the secondary market.
The Ministry of Finance's auction on Thursday of 400 billion
yen of inflation-linked 10-year JGBs resulted in a lowest price
of 104.80, largely in line with market expectations. The
bid-to-cover ratio, a gauge of demand, rose to 3.21, from 2.85
at the previous sale.
(Reporting by Tokyo markets team; Editing by Simon