Ten-year JGB yield rises to 1-week high ahead of U.S. jobs data

Thu Sep 5, 2013 9:33pm EDT

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TOKYO, Sept 6 (IFR) - Japanese government bond prices opened lower on Friday, sending 10-year yield to a one-week high on the back of weaker U.S. Treasuries and ahead of the U.S. jobs report later in the day.

The Ministry of Finance will conduct a monthly 300 billion yen ($3 billion) liquidity enhancement auction for off-the-run 20-year, 30-year, and 40-year JGBs on Friday.

In early morning trading, several regional banks bought 10-year JGBs on dips without waiting for the benchmark yield to reach the 0.80 percent mark, while some active pension funds were seen selling 10-year JGBs.

Price movements might be relatively volatile after midday, as dealers have to square their positions ahead of major data and events over the weekend, including the outcome of Tokyo's bid for the 2020 Olympic Games.

Yields on the current 5-year JGBs were up 1.5 basis points at 0.285 percent, their highest level since Aug. 27.

The 10s were also up 1.5 basis points, at 0.785 percent, their highest level since Aug 5.

In the super-long zone, the 20s were up 1.5 basis points at 1.70 percent, while the 30s added 1 basis point at 1.82 percent, their highest level since Aug 16.

Compared with a surge in yields on U.S. Treasuries and German Bunds overnight, the rise in JGB yields was limited.

Ten-year JGB futures were off 0.14 point at 143.84, moving in a 143.75-143.86 range. The Nikkei 225 index shed 136 points to 13,929, while the dollar hovered at around 99.92 yen after hitting a six-week high of 100.24 yen.

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