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JGBs steady to weaker as investors await U.S. election outcome

TOKYO, Nov 4 (Reuters) - Japanese government bond prices were steady to slightly weaker on Wednesday, as investors looked for clues about the U.S. presidential election results, while a successful 10-year debt sale helped pare some earlier losses.

Yields on Japanese government bonds initially tracked U.S. counterparts higher, with longer-dated Treasury yields rising sharply overnight as investors had priced in a Joe Biden victory.

But investor sentiment across markets quickly changed on signs President Donald Trump could well snatch Florida and was much closer in other major battleground states than polls had predicted.

Despite many headlines going around about early results of the U.S. presidential election, the Japanese bond market is still in wait-and-watch mode, said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities.

The bid-to-cover ratio, a gauge of demand, at the 2.6 trillion yen 10-year debt sale increased to 4.16 from the previous auction’s 4.06.

Following the auction result, benchmark 10-year JGB futures rose 0.14 point to 151.97, with a trading volume of 34,989 lots, while the 10-year JGB yield fell 0.5 basis point to 0.035%.

In the super-long zone, the 20-year JGB yield was flat at 0.410%.

The 30-year JGB yield rose half a basis point to 0.640%, after hitting its highest level since January 2019 of 0.645%.

The 40-year JGB yield was up half a basis point to 0.675%.

At the shorter end of the curve, the two-year JGB yield and the five-year yield stood flat at minus 0.125% and minus 0.095%, respectively. (Reporting by Eimi Yamamitsu; Editing by Rashmi Aich)

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