May 26, 2016 / 4:46 AM / 2 years ago

JGBs edge up as Tokyo shares trim gains, 40-year sale well received

TOKYO, May 26 (Reuters) - Japanese government bond prices edged up on Thursday as a recent surge in Tokyo stocks flagged, and as the market took heart after a 40-year debt auction attracted ample investor demand.

The benchmark 10-year yield fell 1 basis point to minus 0.110 percent, while the 30-year yield dipped half a basis point to 0.335 percent.

The bid-to-cover ratio, a gauge of demand, at the 400 billion yen ($3.65 billion) 40-year auction inched up to 3.07 from 3.06 at the previous sale in February.

In another indication of steady demand for super long JGBs that still offer investors positive yields, the auction’s highest accepted yield of 0.4000 percent was a fresh record low.

Super long JGBs have drawn demand recently from index-tracking investors who extend the duration of their bond portfolios at the turn of each month.

Tokyo’s Nikkei was up 0.4 percent, having surrendered a swathe of earlier gains as the yen see-sawed against the dollar.

$1 = 109.6700 yen Reporting by the Tokyo markets team; Editing by Sunil Nair

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