TOKYO, Jan 15 (IFR) - Japanese government bond prices edged
lower on Wednesday morning as investors positioned for this
session's sale of 30-year bonds.
Trading volume in both cash and futures markets was limited
as many domestic real money accounts did not chase higher prices
after the previous session's gains. A rise in U.S. Treasury
yields, stock prices and dollar/yen overnight also pushed JGB
yields slightly higher.
A few domestic corporate pension fund managers said that
they would buy more superlong JGBs, depending on the results of
Wednesday's monthly 30-year JGB auction.
The Ministry of Finance reopened the current issue for the
regular settlement date in the latest sale. Since the beginning
of October, the spread between 10-year and 30-year yields has
been moving between 97.5 basis points several times in October,
and 106.5 basis points on Dec. 17. It was at 100.5 basis points
The 20-year/30-year yield spread has been moving between 12
basis points on Oct. 10 and 20.5 basis points on Dec. 17, and is
now at 15 basis points.
The average 30-year auction yield for the 10 auctions over
the past year was 1.74 percent. In the previous session, the
yield on the current 30-year JGBs fell 2.5 basis points to 1.665
percent, moving away from Dec. 30's high of 1.74 percent, which
was its highest level since Dec. 16's 1.75 percent.
According to JGB traders, some bearish corporate pension
funds sold five-year to seven-year JGBs on Tuesday to shift into
At midday on Wednesday, the yield on the current five-year
JGBs was up 1 basis point at 0.20 percent, while
the 10-year yield was up 1 basis point at 0.66
In the superlong zone, the 20-year yield was
up 1.5 basis points at 1.515 percent, while the 30-year yield
was flat at 1.665 percent after touching 1.675
Lead March JGB futures moved in a 144.16-144.29
range before finishing midday down 0.10 point at 144.24.