TOKYO, Aug 28 (IFR) - Japanese government bonds mostly edged
higher on Thursday, bolstered as U.S. and European sovereign
bond yields touched record lows overnight.
The 30-year JGB advanced modestly, sending its yield
down 1 basis point to 1.625 percent, after the
yield on the current 30-year U.S. Treasury plunged
as much as 6 basis points to a 15-month low of 3.10 percent
European bonds have gained since European Central Bank
President Mario Draghi said last Friday that the bank was
prepared to respond with "all available tools" if euro zone
inflation dropped further.
In the Tokyo morning session, many domestic real money
accounts took a wait-and-see stance, as 5-year to 20-year JGB
yields have already fallen to their lowest levels since the Bank
of Japan unveiled its quantitative easing regime in early April
Sluggish Tokyo stocks and a stronger yen also had some
positive impact on 30-year JGBs. The Nikkei stock average
was down 0.5 percent, and the dollar slipped
about 0.1 percent to 103.76 yen.
The Ministry of Finance will conduct a monthly 2.7 trillion
yen (26 billion US dollar) 2-year JGB auction on Thursday. The
BOJ, therefore, did not offer to buy JGBs under its massive
asset purchase programme, as it typically refrains from doing so
on days that MOF sells JGBs.
At midday, the yield on the current 2-year JGBs
was down 0.5 basis point at 0.07 percent, while
the 10-year yield was also down 0.5 basis point
at 0.485 percent. The yield on the current 40-year JGBs remained
unchanged from the previous session at 1.785 percent, and the
20-year and 5-year yields were flat
1.325 percent and 0.155 percent respectively.
In the morning session, 10-year lead September JGB futures
moved in a 146.26-146.31 range before ending at midday
up 0.05at 146.29.
(1 US dollar = 103.7600 Japanese yen)
(Reporting by Masatsugu Hisatsune; Editing by Eric Meijer)