June 22, 2017 / 4:35 AM / 2 months ago

JGB yield curve flattens further as super longs gain

TOKYO, June 22 (Reuters) - Longer-dated Japanese government bond prices rose on Thursday and the yield curve continued to flatten due to outperforming super-long maturities.

The super longs took their cues from U.S. Treasuries, which saw their yield curve flatten to almost 10-year lows overnight as investors evaluated the impact of hawkish Federal Reserve policy on the economy even as inflation measures are deteriorating.

The 30-year JGB yield fell 1 basis point to 0.780 percent. The benchmark 10-year yield was flat at 0.055 percent.

Midterm JGBs, in contrast, sagged, with the five-year yield edging up a basis point to minus 0.065 percent, its highest since mid-December.

Short-to-mid-term JGB yields have edged up slowly but steadily over the past few months as the Bank of Japan has trimmed the amount of bonds of these maturities it buys.

The BOJ has been trimming its buying of bills and shorter-dated debt at regular JGB-buying operations in an attempt to improve market liquidity, which had practically dried up under its extensive easing scheme. (Reporting by the Tokyo markets team; Editing by Sherry Jacob-Phillips)

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