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JGBs edge lower in quiet trade ahead of U.S. jobs data
October 7, 2016 / 6:31 AM / a year ago

JGBs edge lower in quiet trade ahead of U.S. jobs data

TOKYO, Oct 7 (Reuters) - Japanese government bonds mostly eased on Friday but trade was thin as markets awaited U.S. employment data which could alter the odds on an expected Federal Reserve interest rate hike this year.

The benchmark 10-year JGB yield was flat at minus 0.065 percent, while December 10-year futures ended down 0.01 point at 151.99.

U.S. Treasury yields rose to three-week highs on Thursday ahead of the nonfarm payrolls report, which is expected to show a rise of 175,000 jobs in September, according to the median estimate of 100 economists polled by Reuters.

The Bank of Japan offered to buy 410 billion yen ($3.95 billion) of 1- to 5-year JGBs, 190 billion yen of 10- to 25-year JGBs and 110 billion yen of 25- to 40-year JGBs under its asset purchase operations.

The amounts were in line with market expectations, after the central bank said a week ago that it would trim its buying of long-dated JGBs this month.

The 20-year JGB yield added 1 bp to 0.390 percent , while the 30-year yield also rose 1 bp to 0.505 percent.

The BOJ last month adopted a new tactic of keeping the 10-year yield at around zero percent. But trying to control bond yields is an unprecedented approach, and analysts are not sure whether the BOJ will succeed.

But recently, investors’ JGB options positioning suggests many debt market participants are betting that the central bank will achieve its aim of controlling JGB yields within its desired ranges.

$1 = 103.9000 yen Reporting by Tokyo markets team; Editing by Kim Coghill

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