March 27, 2018 / 4:11 AM / 6 months ago

JGBs dip as stocks rally amid ebb in trade war fears

TOKYO, March 27 (Reuters) - Japanese government bond prices dipped across the board on Tuesday, as the stock market rallied due to an ebb in trade war fears and reduced investor demand for safe-haven debt.

The five-year yield rose 1 basis point to minus 0.115 percent, while the 10-year yield was up 1 basis point at 0.010 percent.

The 30-year yield edged up 0.5 basis point to 0.740 percent after declining to 0.735 percent late last week when fears of a trade conflict between the United States and China shook the global financial markets.

Tuesday’s 500 billion yen ($4.73 billion) 40-year auction attracted sufficient demand, with the recent surge in the yen seen making it difficult for the Bank of Japan to reduce its purchases of super long JGBs at its regular debt-buying operations.

The bid-to-cover ratio, a gauge of demand, at Tuesday’s 40-year auction was 3.19, matching the average from the past five sales.

Japan’s Nikkei share average was up 2.3 percent as worries about a trade war eased on optimism that the United States and China could begin negotiations, helping trade-exposed sectors such as chip manufacturers. ($1 = 105.6200 yen) (Reporting by the Tokyo markets team; Editing by Subhranshu Sahu)

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