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JGBs gain on BOJ operation and global bond advance, curve flattens
February 24, 2017 / 3:45 AM / 8 months ago

JGBs gain on BOJ operation and global bond advance, curve flattens

TOKYO, Feb 24 (Reuters) - Japanese government bond prices gained on Friday, helped by a regular Bank of Japan buying operation, with the yield curve at its flattest in three weeks as the market tracked a recent decline in global debt yields.

The benchmark 10-year JGB yield fell a basis point to 0.065 percent, its lowest in a month.

The 10-year yield has spiked to a one-year peak of 0.150 percent at the start of February as doubts mounted towards the Bank of Japan’s commitment to its massive debt-buying scheme.

But the yield has since declined as the central bank has helped soothe nerves by conveying to the market that it remains committed to JGB buying, at least for the foreseeable future.

Super long JGBs, already on a bullish footing after Thursday’s 20-year auction attracted strong investor demand, outperformed as the BOJ conducted a regular JGB buying operation in the zone.

The 30-year yield fell 4 basis points to 0.810 percent.

The yield curve flattened as a result, with the 10-year/30-year yield spread at its tightest in three weeks.

U.S. Treasury debt yields fell on Thursday as investors fretted about the lack of clarity in the Trump administration’s policies.

In Europe, recent debt market volatility eased slightly, with French government bond yields pulling back after rising earlier in the week. French yields fell as a new centrist pact in the country’s presidential election race eased market concerns about far-rightist Marine Le Pen gaining ground. (Reporting by the Tokyo markets team; Editing by Jacqueline Wong)

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