July 3, 2014 / 3:05 AM / 3 years ago

JGBs inch lower as investors await 10-year auction results

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TOKYO, July 3 (IFR) - Japanese government bonds prices were modestly lower on Thursday, as investors positioned for this session's 10-year sale.

A continued rise in U.S. Treasury yields and stock prices overnight had some negative impact on market sentiment ahead of the monthly 2.4 trillion yen ($23.56 billion) sale of 10-year JGBs.

The Ministry of Finance set the coupon of the new issue at 0.6 percent for the ninth straight month, re-opening the current issue for the regular settlement date.

With yields on the current 10-year JGBs not far from the more than one-year low of 0.550 percent touched on Tuesday, domestic investors appear hesitant to chase higher prices in this auction, according to JGB traders and money managers.

The Bank of Japan, as expected, refrained from purchasing any JGBs under its massive asset-buying scheme, as it typically does not offer to buy any JGBs on the days on which MOF conducts auctions. The BOJ is expected to buy long-term and superlong JGBs on Friday.

Yields on the 10-year, 20-year and 30-year JGBs all rose half a basis point from Wednesday to 0.565 percent , 1.425 percent and 1.675 percent , respectively.

Ten-year lead September JGB futures moved in a narrow range of 145.57-145.62 and ended the morning session down 0.05 point at 145.59. ($1 = 101.8700 Japanese Yen) (Reporting by Masatsugu Hisatsune; Editing by Richard Borsuk)

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