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JGBs edge down on weaker Treasuries, 2-year auction well received
February 28, 2017 / 4:29 AM / in 9 months

JGBs edge down on weaker Treasuries, 2-year auction well received

TOKYO, Feb 28 (Reuters) - Japanese government bond prices edged down on Tuesday following an overnight retreat by U.S. Treasuries, although the short-end of the curve held firm helped by a well-received two-year debt auction.

The benchmark 10-year JGB yield rose half a basis point to 0.050 percent.

Yields were confined to a tight range as a wait-and-see mood prevailed before U.S. President Donald Trump’s address to Congress later in the day.

Also in focus was the Bank of Japan’s announcement of details for next month’s bond buying operations at 0800 GMT. The central bank holds roughly a third of JGBs and how it conducts its bond purchasing operations is of chief interest to dealers and investors.

Through its purchases the BOJ has significantly tightened the supply of JGBs, and Tuesday’s 2.3 trillion yen ($20.43 billion) two-year auction attracted firm investor demand under such conditions.

The bid-to-cover ratio, a gauge of demand, at the auction was at 3.93. While this was lower than the 5.18 from the previous two-year sale in January, dealers generally consider a ratio above 2.0 as satisfactory.

The two-year yield was half a basis point lower at minus 0.275 percent. ($1 = 112.5700 yen) (Reporting by the Tokyo markets team; Editing by Jacqueline Wong)

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