TOKYO, March 2 Japanese government bonds mostly
slipped on Thursday as they took their cue from weaker U.S.
Treasuries and firmer Japanese equities, but were underpinned by
decent demand at an auction of 10-year JGBs.
The benchmark 10-year JGB yield rose 0.5 basis point to
0.065 percent, while 10-year JGB futures were up
0.03 point in afternoon trade at 150.50, up from their
morning close of 150.38.
U.S. Treasury yields rose broadly on Wednesday, with the
2-year yield hitting a more than seven-year high, on
increased expectations that the Federal Reserve will raise U.S.
overnight interest rates at its March meeting.
Those expectations also lifted the U.S. dollar against the
yen, which helped the Nikkei stock index rise to
14-month highs and undermined the appeal of fixed income assets.
At the Ministry of Finance's sale of 2.4 trillion yen
($21.1 billion) of 10-year JGBs with a 0.1 percent coupon, some
49.6521 percent of the bids were accepted at the lowest price of
The sale drew bids of 3.74 times the amount offered, up
from the previous sale's bid-to-cover ratio of 3.62 times,
suggesting stronger demand for the bonds. The tail between the
average and lowest accepted prices came in at 0.04, nearly
matching that of last month's offering at 0.05.
The superlong zone underperformed on concerns that the Bank
of Japan could trim its purchases in that zone in its JGB buying
The 20-year yield rose 3 bps to 0.680
percent, while the 30-year JGB yield added 4 bps
to 0.875 percent.
On Tuesday, the BOJ announced the dates of its bond-buying
operation for this month, in a plan suggesting it is likely to
maintain the pace of purchases in most maturities while slightly
reducing its short-term bond purchases.
($1 = 113.9500 yen)
(Reporting by Tokyo markets team; Editing by Jacqueline Wong)