JGBs barely move before 5-year bond auction
TOKYO, Oct 16 (IFR) - JGB prices ended the morning session on Wednesday steady to modestly higher, with domestic real money accounts largely sidelined as investors took a wait-and-see stance amid continuing concerns over the U.S. debt deal.
The Ministry of Finance offered 2.7 trillion yen ($27.4 billion) in its monthly 5-year JGB auction. As widely expected, the ministry announced that it had lowered the coupon by 0.1 percentage point to 0.2 percent.
The yield on the current 5-yr JGBs moved little in the morning session at 0.235 percent, trading exactly at the average auction yield over the previous 12 auctions.
Several regional bankers expect the auction to go smoothly on expectations that the Bank of Japan will keep yields at current levels or lower for a few years under its massive JGB buying programme.
Meanwhile, a few corporate pension fund managers said they needed much higher yields to cover their costs and interest rate risks.
At midday, yields on the current 10-year JGBs were unchanged at 0.660 percent, while both the 20-year yield and the 30-year were down a half basis point at 1.525 percent and 1.660 percent, respectively.
Lead December JGB futures moved in a 144.18-144.29 range before finishing midday up 0.02 point at 144.27.
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