JGBs gain after U.S. Treasuries jump on jobs data

Mon Jan 13, 2014 10:14pm EST

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TOKYO, Jan 14 (IFR) - Japanese government bond prices rose sharply on Tuesday, with the benchmark 10-year yield slipping to a four-week low, after a weaker-than-expected U.S. payroll data boosted U.S. Treasuries.

The 10-year yield dropped 3.0 basis points to 0.665 percent , its lowest since Dec. 19, having fallen substantially from a three-month high of 0.740 percent hit in late December.

Japanese markets were closed on Monday for a public holiday, making the Tuesday session the first chance to react to last Friday's U.S. jobs data, which showed U.S. added only 74,000 workers in December, far short of the 196,000 rise forecast by analysts.

The subsequent falls in U.S. bond yields prompted JGB traders to cover their short positions on Tuesday.

Still, many domestic real money accounts did not chase higher prices for now, market players said.

The current 5-year JGB yield fell 1.0 basis point from last Friday to 0.200 percent while the 20-year yield fell 2.5 basis points to 1.505 percent.

The benchmark March 10-year JGB futures gained 0.33 in price to 144.15.

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