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JGBs wobble on profit taking, but off lows after 2-yr sale draws demand
March 30, 2017 / 4:36 AM / 8 months ago

JGBs wobble on profit taking, but off lows after 2-yr sale draws demand

TOKYO, March 30 (Reuters) - Japanese government bond prices were weaker on Thursday as the longer-dated maturities came under profit taking following large gains, but the market came off lows after an auction of two-year debt attracted sufficient investor demand.

June 10-year JGB futures were down 0.05 point at 150.40 after stooping to 150.33 earlier in the session.

The two-year yield was 2 basis points higher at minus 0.235 percent after rising to as high as minus 0.230 percent.

The bid-to-cover ratio, a gauge of demand, at Thursday’s 2.2 trillion yen ($19.78 billion) two-year auction remained at a relatively high 3.82, compared with the previous sale’s ratio of 3.92.

Concerns about the Bank of Japan trimming the amount of shorter-dated JGBs it buys at its regular market operations were offset by the lower auction amount, traders said.

Starting this month, the finance ministry has opted to reduce two-year auction amounts by 100 billion yen.

The 30-year yield rose 1.5 basis points to 0.835 percent as investors sold into the previous day’s bullish move, when super long yields fell on month-end demand stemming from index-following participants. ($1 = 111.2500 yen) (Reporting by the Tokyo markets team; Editing by Subhranshu Sahu)

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