10-year JGB yield falls to 1-week low on buying by public funds
TOKYO, Sept 10 (IFR) - Japanese government bond prices edged higher on Tuesday, with traders citing buying by public funds, including public employee pension funds at local governments, pushing the 10-year yield to a one-week low.
The 10-year yield slipped 1.5 basis points to 0.735 percent, while the 10-year futures gained 0.25 point to 143.54.
Apart from the Bank of Japan buying JGBs, a large semi-public savings bank was also in the market on Monday, while some passive pension funds also purchased 7-year and 10-year sectors ahead of a massive quarterly redemption of JGBs set for Sept 20.
The 30-year yield eased 2.5 basis points to 1.780 percent, hitting a one-week low, ahead of an auction of 600 billion yen ($6 billion) of the same maturities later in the day. The Ministry of Finance offered the 30-year bond with a coupon of 1.80 percent.
The 20-year yield fell 2 basis points to 1.655 percent, while the five-year yield dipped 0.5 basis point to 0.260 percent.
Earlier, minutes of the Bank of Japan's August rate review showed policymakers were confident their aggressive monetary stimulus was working and urged the government to promote fiscal reforms to keep unwelcome bond yield rises in check.
Prime Minister Shinzo Abe is expected to decide in early October whether to proceed with a planned two-stage hike in the sales tax from next year, seen as a key first step to rein in Japan's ballooning public debt.