January 20, 2020 / 6:21 AM / a month ago

JGBs slightly weaker, super-long yields at 2-month high

TOKYO, Jan 20 (Reuters) - Prices of most Japanese government bonds (JGBs) fell on Monday, with yields on long-dated bonds rising to two-month highs after an auction of 20-year JGBs last week, while investors also awaited remarks from Bank of Japan governor later in the week.

The 30-year JGB yield rose 1.5 basis points to 0.470%, its highest since mid-November, while the 40-year yield rose 1.5 bps to a two-month high of 0.500%.

The 20-year JGB yield rose 0.5 bp to 0.315%. Their yields rose as traders were stuck with large long positions after a 20-year JGB auction last Friday.

Many investors refrained from buying them ahead of the Bank of Japan’s policy meeting that ends on Tuesday.

While no policy change is expected, BOJ governor Haruhiko Kuroda has repeated his message in recent months that he would not mind the yield curve steepening a bit further i.e. higher yields on long-dated bonds.

The 10-year JGB yield rose 0.5 bp to minus 0.005%, though zero percent is seen as a technical yield resistance as there appear to be some demand whenever the yield hits positive territory.

Benchmark 10-year JGB futures fell 0.07 point to 151.95.

At the shorter end, two-year JGB yield fell 0.5 bp to minus 0.140% while the five-year yield rose 0.5 bp to minus 0.100%.

Reporting by Tokyo Markets Team; editing by Uttaresh.V

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