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JGB yields hit 10-month high as super longs slump after auction
December 9, 2016 / 5:38 AM / a year ago

JGB yields hit 10-month high as super longs slump after auction

TOKYO, Dec 9 (Reuters) - The benchmark Japanese government bond yield hit a 10-month high on Friday as the super long maturities slumped following the previous day’s 30-year debt auction.

The 30-year JGB yield rose 5.5 basis points to 0.705 percent , its highest since mid-March.

“It appears that some participants opted to sell a part of the new 30-years bought yesterday as they were not included in the Bank of Japan’s debt purchases today,” said a dealer with a domestic brokerage.

The BOJ regularly buys JGBs from the market as part of its big debt-purchasing scheme.

Japan’s finance ministry had sold 800 billion yen ($7.00 billion) of 30-year JGBs on Thursday.

The 10-year benchmark JGB yield was up 1 basis point at 0.050 percent after hitting 0.055 percent, its highest since February.

Market focus was on whether the BOJ would be prompted to act should the yield rise further.

The central bank introduced a policy in September to keep the 10-year yield around zero percent, and the market sees levels around 0.050 percent as the upper limit of its target range.

Turbulence in the eurozone bond market following the European Central Bank’s policy decision on Thursday also added to the upward bias on JGB yields.

Long-dated eurozone bond yield climbed on Thursday after the ECB extended its asset purchase programme but at a reduced level and introduced measures allowing it to buy more short-dated bonds.

$1 = 114.2600 yen Reporting by the Tokyo markets team; Editing by Subhranshu Sahu

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