JGBs edge up in quiet trade as stocks slump

Sun Jan 5, 2014 10:06pm EST

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TOKYO, Jan 6 (IFR) - Japanese government bond prices ended the morning session modestly higher on Monday, bolstered by rising risk aversion as stocks slumped.

In early morning trade, a few regional banks bought 5-year and 10-year JGBs to average down their costs as Tokyo stocks fell, though gains were limited by caution ahead of Tuesday's monthly 2.4 trillion yen ($22.97 billion) sale of 10-year notes.

As expected, the Bank of Japan offered to buy 200 billion yen in the 10-year and longer zone under its JGB purchase programme, in addition to 250 billion yen in the 3-year to 5-year zone, and 250 billion yen in the 1-year to 3-year zone.

In late morning trade, the current 10-yr JGBs (issue #332) extended their earlier gains slightly, sending their yield down from 0.735 percent to 0.730 percent, down 1 basis point from the previous close.

Many domestic real money accounts remained sidelined after a long Japanese New Year holiday. Yields on the current 5-year notes, as well as those on 20-year and 30-year bonds, moved little, and were all down half a basis point at 0.23 percent , 1.575 percent and 1.725 percent , respectively.

Lead March JGB futures moved in a narrow 143.32-143.50 range before finishing midday up 0.17 point at 143.49.