TOKYO Oct 4 Japanese government bonds slipped
on Thursday, with benchmark yields moving away from an
eight-week low touched earlier this week, as the impact of
stronger stocks offset any benefit from firm demand at a 10-year
The Ministry of Finance offered 2.3 trillion yen ($29.3
billion) of reopened 10-year notes with a coupon of 0.80
percent, matching that of the previous three sales.
It garnered a lowest accepted price of 100.28 to yield 0.769
percent, with the bid-to-cover ratio rising to 3.4 from the
previous sale's 2.84.
"The result was as expected, and the market is more or less
steady, even after the auction result came out. Some extra hedge
selling, plus firmer stocks and a weaker yen in the FX market
encouraged some profit taking on JGBs," said Naomi Muguruma,
senior strategist at Mitsubishi UFJ Morgan Stanley Securities.
"There are some position adjustments before the employment
report in the U.S. to be out tomorrow night, but I don't think
the market will extend losses. I think there's still good
buy-on-dip demand for cash JGBs," she added.
The Nikkei extended early gains and was up more than
1 percent in afternoon trading.
In cash bond trading, the 10-year yield edged
up one basis point to 0.775 percent, moving away from the 0.755
percent level touched on Tuesday and Wednesday, which was its
lowest level since Aug. 7.
Ten-year JGB futures shed 0.15 point to 144.10, up
from a post-auction low of 144.07 but below their morning
session close at 144.15. Futures touched an eight-week high of
144.33 on Wednesday.
Selling weighed on the superlong sector as well in the
afternoon, with the 20-year yield and the 30-year
yield both adding a basis point to 1.660 percent
and 1.915 percent, respectively.