January 7, 2020 / 6:07 AM / 18 days ago

JGBs slip on improving risk sentiment

TOKYO, Jan 7 (Reuters) - Japanese government bond (JGB) prices slipped on Tuesday, with benchmark futures giving up previous session’s gains, as investors assessed the risk of a further escalation in tensions between the United States and Iran.

However, losses were pared after an auction of 2.1 trillion yen ($19.36 billion) 10-year JGBs attracted decent demand.

Benchmark 10-year JGB futures fell 0.22 point to 152.12, while the 10-year JGB yield rose 2 basis points to minus 0.015%.

The auction produced a tail — the gap between the lowest and average prices — of 0.02, much smaller than 0.16 in the previous auction in December. Bid-to-cover also rose to 3.70 from 3.28.

The 20-year yield rose 3 basis points to 0.295%, while the 30-year yield rose 3.5 basis points to 0.435%.

Risk sentiment improved globally after Wall Street battled back in the green as investors grew less concerned about the chance of an all-out conflict between Washington and Tehran. ($1 = 108.47 yen) (Reporting by Tokyo Markets Team; editing by Uttaresh.V)

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