March 5, 2019 / 4:47 AM / 3 months ago

JGBs dip as 10-year bond auction attracts lukewarm demand

TOKYO, March 5 (Reuters) - Japanese government bond prices fell on Tuesday after an auction for 10-year papers attracted tepid demand amid uncertainty about the central bank’s debt-buying scheme.

The five-year and the 10-year yields were both 0.5 basis points higher at minus 0.145 percent and zero percent, respectively.

The bid-to-cover ratio, a gauge of demand, at the 2.2 trillion yen ($19.66 billion) 10-year JGB auction on Tuesday declined to 4.25 from 4.80 at the previous sale in February.

Demand for the new 10-year papers was seen to have softened with the Bank of Japan poised to reduce the frequency of debt-buying operations in March.

The central bank said last week it would buy JGBs with over five to 10 years to maturity in four instalments in March, compared to five purchases a month in the previous six months.

The BOJ has been gradually slowing the pace of its debt purchases as its holdings near almost half of the entire market. ($1 = 111.9100 yen) (Reporting by the Tokyo markets team; Editing by Shreejay Sinha)

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