January 21, 2019 / 7:50 AM / 4 months ago

JGBs edge lower as safe-haven appeal of debt fades on stronger equities

TOKYO, Jan 21 (Reuters) - Japanese government bond (JGB) prices edged down on Monday as gains in Japanese and U.S. equities helped improve investors’ risk appetite and dampened the safe-haven appeal of government debt.

The Nikkei share average rose nearly 0.3 percent and closed at its highest since Dec. 19. It tracked Wall Street’s gains in the previous session after increased hopes the United States and China would resolve their trade dispute lifted investor sentiment.

The benchmark 10-year JGB yield was flat at 0.005 percent, while the 30-year yield rose half a basis point to 0.695 percent.

Yields on shorter-dated maturities also edged higher, with the two-year and five-year yields both gaining 0.5 basis point, to minus 0.170 percent and minus 0.155 percent, respectively.

Foreign investors increased their net JGB purchases in December, data from the Japan Securities Dealers’ Association showed on Monday.

Foreigners bought a net 4.42 trillion yen ($40.34 billion) of JGBs, the highest amount on record, according to data going back to April 2004, and up from 2.88 trillion yen in November.

Ten-year JGB futures ticked up 0.01 point to 152.52, with a trading volume of 19,440 lots.

The gains in JGB yields were limited as the Bank of Japan conducted a regular debt-buying operation and offered to buy 1 trillion yen ($9.13 billion) of one- to five-year and 10- to 40-year bonds on Monday. ($1 = 109.57 yen) (Reporting by Tokyo Markets team; Editing by Subhranshu Sahu)

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