Long-dated JGB yields dip ahead of 20-year debt sale

TOKYO Mon Aug 26, 2013 10:17pm EDT

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TOKYO Aug 27 (Reuters) - Yields on superlong Japanese government bonds inched down on Tuesday, leading to a flattening in the long end of the yield curve ahead of an auction of 20-year debt later in the day.

* "It's going to be a boring auction ... no surprise will occur. The Bank of Japan will buy tomorrow in the 10, 20-year sectors, so dealers have no concerns about today's auction," said a fixed-income fund manager at a Japanese asset management firm in Tokyo, referring to the Japanese central bank's bond-buying operations to revive growth.

* Both the 20- and 30-year yields were down 0.5 basis point, at 1.690 and 1.805 percent, respectively.

* The Ministry of Finance offers 1.2 trillion yen ($12.2 billion) in 20-year JGBs with a coupon of 1.70 percent. It is to sell 2.9 trillion yen in two-year bonds on Thursday.

* Ten-year JGB futures rose 0.11 point to 143.86, helped by gains in U.S. Treasuries overnight after softer-than-expected durable goods order in July.

* Both the five- and 10-year yields were unchanged, at 0.295 and 0.760 percent, respectively.

* U.S. orders for long-lasting manufactured goods fell 7.3 percent last month, more than the 4 percent fall forecast by economist polled by Reuters.

* The data, which came after last week's figures showed a sharp decline in July new-home sales, raised some doubts whether the U.S. Federal Reserve will start to reduce its $85 billion monthly bond-buying programme as soon as next month.

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