JGBs slip, tracking overseas bond markets; auction results eyed

Mon Dec 2, 2013 10:31pm EST

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TOKYO, Dec 3 (IFR) - Japanese government bond prices slipped on Tuesday morning, taking cues from weakness in European and U.S. bond markets overnight, while investors awaited the results of a JGB liquidity enhancement auction.

According to JGB traders, even bullish life insurers and pension funds took a wait-and-see stance ahead of the session's monthly 300 billion yen ($2.9 billion) liquidity enhancement auction for old 20-year, 30-year and 40-year JGBs.

If the auction results are stronger than expected, a few bullish life insurers and pension funds might buy more superlong JGBs in the afternoon session, the traders said.

At midday, the current five-year JGB was yet to be priced, while the 10-year yield was up 1 basis point at 0.620 percent.

In the superlong zone, the 20-year yield was up 1 basis point at 1.495 percent, while the 30-year yield was up 1.5 basis points at 1.665 percent. On Monday, both the 20-year yield and the 30-year yield fell 0.5 basis point in thin trading.

Lead December JGB futures moved in a narrow 144.93 to 144.99 range before finishing the morning session down 0.06 point at 144.97.

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