March 23, 2017 / 6:18 AM / 8 months ago

JGBs supported on U.S. bonds, waning BOJ policy expectations

TOKYO, March 23 (Reuters) - Japanese government bonds were supported on Thursday by the firmness in U.S. bonds and waning expectations that the Bank of Japan could raise its bond yield target later this year.

The benchmark 10-year JGB futures rose 0.06 point to 150.48, while the yield on the benchmark 10-year cash JGBs stood flat at 0.055 percent.

U.S. bond yields hit a three-week low on Wednesday as investors reduced expectations that the Federal Reserve is likely to adopt a faster path in raising interest rates.

Investors also think any new fiscal stimulus from U.S. President Donald Trump is seen as unlikely in the near-term.

The expectations that the BOJ may have to notch up its 10-year bond yield target in line with the rise in global bond yields are also diminishing, supporting JGBs.

“I thought it was far-fetched to think that the BOJ will change its bond yield target any time soon. It seems like that thinking is sinking in among market players,” said a fund manager at a U.S. asset management firm.

The five-year yield dipped 0.5 basis point to minus 0.16 percent.

Bucking the trend were maturities around 20-year bonds, which saw fairly big selling interest in the BOJ’s bond-buying operation on Thursday.

The 20-year yield rose 0.5 basis point to 0.640 percent . (Reporting by Tokyo Markets Team; Editing by Sherry Jacob-Phillips)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below