August 2, 2019 / 4:58 AM / 2 months ago

JGB futures soar as Trump threat boosts allure of debt

TOKYO, Aug 2 (Reuters) - Japanese government bond futures on Friday gained the most since January as yields on cash bonds sagged across the curve after U.S. President Donald Trump broke a truce in the Sino-U.S. trade negotiations, bolstering demand for safe-haven assets.

Benchmark 10-year JGB futures rose 0.41 point to 153.95, with a trading volume of 25,206 lots. The rise in JGB futures wiped out declines from the previous session sparked by U.S. Federal Reserve Chairman Jerome Powell ruling out a prolonged series of interest rate cuts.

The 10-year JGB yield fell 4 basis points to minus 0.175%, the lowest yield in six weeks.

At the short end of the curve, benchmark two-year JGB yield fell 2 basis points to minus 0.210%.

The 20-year JGB yield fell 4.5 basis points to 0.175%.

The 30-year JGB yield dropped 4.5 basis points to 0.320%, the lowest yield in almost six weeks.

The yield curve, or the difference in yields between two-year and 10-year government debt, flattened further on Friday, continuing a trend that started in October last year.

Trump said he would impose an additional 10% tariff on $300 billion worth of Chinese imports on Sept. 1 after U.S. negotiators returned from trade talks in Shanghai, saying China had failed to buy large quantities of U.S. agricultural products as promised.

Reporting by the Tokyo Markets team, Editing by Sherry Jacob-Phillips

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