June 5, 2017 / 7:36 AM / 6 months ago

JGBs mostly gain as BOJ purchases, 30-year auction awaited

TOKYO, June 5 (Reuters) - Japanese government bonds mostly gained on Monday, taking cue from stronger U.S. Treasuries after disappointing U.S. employment data prompted investors to pare back expectations of Federal Reserve rate hikes.

But two-year JGBs edged lower, with their yield nudging up to touch its highest level since November. For both May and April, the Bank of Japan trimmed the amount of shorter-dated JGBs it bought compared with previous months, though it kept its buying ranges intact for June.

The 10-year cash JGB yield inched half a basis point lower to 0.045 percent, while 10-year JGB futures added 0.03 point to finish at 150.72 after rising as high as 150.79 in the morning session.

In the superlong zone, the 20-year JGB yield, and the 30-year JGB yield both shed half a basis point to 0.560 percent and 0.800 percent respectively, ahead of a 30-year auction on Tuesday as well as expected purchases of longer-dated JGBs by the BOJ.

But at the shorter end, the two-year yield added one basis point to minus 0.150 percent, after rising to minus 0.145 percent earlier.

The yield on the benchmark U.S. 10-year note stood at 2.167 percent in Asian trading, not far from its Friday low of 2.144 percent, which was its lowest since Nov. 10, after May’s rise in U.S. nonfarm payrolls fell short of forecasts.

Reporting by Tokyo markets team; Editing by Sherry Jacob-Phillips

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