June 12, 2020 / 6:58 AM / a month ago

JGBs slip after weak BOJ operation, fail to capitalise on stock losses

TOKYO, June 12 (Reuters) - Japanese government bond prices sagged on Friday, following tepid results of a bond operation by the Bank of Japan and amid a lack of follow-through buying after initial gains on global stocks sell-off.

The 10-year JGB yield rose 0.5 basis point to 0.010%, bouncing back after falling below zero percent for the first time since late May.

Although the yield fell earlier on global stock market sell-off on doubts about the economic recovery scenario, few investors were ready to buy negative-yielding bonds.

The 20-year JGB yield also edged up 1.5 basis points to 0.370% after dipping to 0.345% earlier in the day. The 30-year JGB yield rose 1.5 basis points to 0.530%.

At the shorter end of the market, the two-year JGB yield rose 0.5 basis point to minus 0.160%, while the five-year yield gained 0.5 basis point to minus 0.110%.

The Bank of Japan bought 1-3 and 3-5 year maturities in its operation on Friday, keeping the size of its buying unchanged from previous operations at 340 billion yen ($3.17 billion) and 320 billion yen respectively.

The buying drew fairly large selling interest from brokers, helping to push down prices.

Benchmark 10-year JGB futures price rose 0.02 point to 152.19, with a trading volume of 13,649 lots.

$1 = 107.1700 yen Reporting by Hideyuki Sano

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