TOKYO Dec 30 Japanese government bonds gave up
earlier gains and slipped on Friday as the market braced for
next week's 10-year debt auction.
March 10-year futures were down 0.09 point at
150.16 after climbing to 150.45 earlier in response to overnight
gains by U.S. Treasuries.
Ahead of an auction of the maturity on Jan. 5, the benchmark
10-year JGB yield was up 1.5 basis points at
0.055 percent, pulling away from a three-week trough of 0.035
percent touched the previous day.
The 30-year yield rose 2.5 basis points to
"Selling is centred mainly in the super long maturities. But
last-minute bids from index-following investors are likely to
limit losses," said a dealer at a domestic securities house.
Index-following investors such as life insurers and pension
funds usually buy longer-dated JGBs at the turn of each month to
adjust the durations of their bond portfolios.
The 10-year JGB yield, which yielded 0.055 percent on
Friday, was on track for a decline of about 20 basis points on
the year, having ended 2015 near 0.300 percent.
The yield fell below zero earlier in the year under the Bank
of Japan's negative interest rates policy, and touched a record
low of minus 0.300 percent in July amid turmoil in global
markets following Britain's Brexit vote.
But it has since climbed out of negative territory as the
BOJ did not boost its already aggressive bond buying, eventually
opting for a yield curve control scheme under which it aims to
keep the benchmark yield around zero percent.
JGB yields have also recently felt the tug from the surge in
Treasury yields that took place after the U.S. elections in
(Reporting by the Tokyo markets team; Editing by Kim Coghill)