April 5, 2012 / 3:02 AM / 6 years ago

JGBs rise after Spain auction rekindles Europe fears

TOKYO, April 5 (Reuters) - Japanese government bond prices rose on Thursday, after a weak Spanish bond auction sapped investors’ risk appetite, weighed on stocks and rekindled fears about Europe’s debt situation.

* The June 10-year JGB futures contract gained 0.15 point to 141.73.

* The yield on 10-year notes fell 1.5 basis point to 1.010 percent, moving further away from the March 15 high of 1.060 percent, which is seen as major support.

* Spain’s borrowing costs jumped at bond auctions on Wednesday, with the 10-year bond yield leaping to 5.7 percent, its highest since January. That heightened concerns about funding difficulties by lower-rated euro zone countries.

* “The major concerns regarding headwinds still exist. If there’s global headwinds, JGBs will continue to do very well,” said a trader at a European brokerage in Tokyo.

“It will be slow grind, if anything in Japan, for higher rates, if they ever get there. I don’t see an environment in the near-term where rates will be under pressure,” he added.

* Slumping stocks added to investors’ risk aversion and raised the appeal of bonds. The benchmark Nikkei extended the previous session’s sharp losses and shed 0.8 percent to a four-week low.

* The 30-year bond yield slipped one basis point to 1.970 percent, moving away from a four-month high of 1.990 percent hit on Wednesday.

* The 20-year bond yield fell two basis points to 1.780 percent, while the five-year bond yield slipped 1.5 basis point to 0.330 percent.

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