June 13, 2019 / 6:53 AM / a month ago

Long-dated JGB prices fall as 30-year bond auction receives weak demand

TOKYO, June 13 (Reuters) - Super-long Japanese government bond (JGB) yields jumped back on Thursday, after a 30-year bond auction received weak investor demand.

The bid-to-cover ratio, a gauge of demand, at Thursday’s 700 billion yen ($6.5 billion) 30-year JGB sale fell to 3.47 from 4.65 at the previous auction in May. The auction’s tail, or gap between the lowest and accepted prices, was 0.87, the widest in the past 5 years.

The results undershot market expectations because many investors had very high expectations after last month’s strong auction results and recent rally in global bond markets.

Market analysts attributed the disappointing auction results to some advance buying.

In the super-long zone, the 30-year cash JGB yield jumped 2.5 basis points to 0.365%, while the 40-year yield climbed 2 basis points to 0.395% and the 20-year yield advanced one basis point to 0.255%.

September 10-year JGB futures, which took over the benchmark status from June contract on Wednesday, ended the session unchanged at 153.44, with a trading volume of 32,136 lots, while the 10-year cash JGB yield was also flat at minus 0.130%. ($1 = 108.3500 yen) (Reporting by the Tokyo markets team; Editing by Rashmi Aich)

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