Benchmark JGBs steady, 30-year tenor outperforms

Thu Jul 17, 2014 12:35am EDT

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TOKYO, July 17 (IFR) - Benchmark Japanese government bond prices were steady on Thursday, while purchases by the Bank of Japan under its asset-buying easing programme lifted the superlong tenor.

The BOJ offered to buy 30 billion yen ($295.54 million) of 25-year to 40-year JGBs, 100 billion yen of 10-year to 25-year JGBs and 400 billion of 5-year to 10-year JGBs. On June 23, the BOJ purchased JGBs in the same zones and amounts under the programme.

The yield on the current 30-year JGBs fell back from its intraday high of 1.690 percent to 1.675 percent, down 2 basis points from Wednesday, on sporadic dip-buying demand and dealers' short covering, according to JGB traders.

A bullish curve-flattening bias in U.S. Treasuries overnight also had some positive impact on superlong JGBs after Federal Reserve Chair Janet Yellen's second day of semi-annual congressional testimony.

Yellen stood by her view that accommodative U.S. monetary policy is still needed even though the economy is recovering.

The yield on the current 5-year JGB was steady at 0.155 percent, ahead of Friday's monthly 2.7 trillion yen auction of 5-year JGBs.

The 10-year yield was flat at 0.540 percent, while the 20-year yield edged down 1 basis point to 1.395 percent.

Ten-year lead September JGB futures added 0.06 point on the day to 145.91, after finishing the morning session at 145.89. ($1 = 101.5100 Japanese Yen) (Reporting by Masatsugu Hisatsune)

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