August 14, 2018 / 4:18 AM / a year ago

JGBs dip as broader risk aversion ebbs for now

TOKYO, Aug 14 (Reuters) - Japanese government bond prices dipped on Tuesday as risk aversion in the broader financial markets triggered by concerns over Turkish lira seems to have settled for now, reducing investor demand for safe-haven debt.

The two-year JGB yield and the 10-year yield each rose half a basis point to minus 0.115 percent and 0.100 percent, respectively.

The 30-year yield climbed 1.5 basis points to 0.840 percent.

Global markets have been shaken as a recent retreat by Turkey’s lira turned into a rout, highlighting the grave economic woes gripping the country and stoking fears of financial turmoil spreading to other emerging economies.

A degree of calm was later restored as Turkey’s central bank pledged on Monday to provide liquidity, stopping further decline in the lira, which had plunged to a record low. However, concerns lingered as the central bank refrained from taking more substantial measures, such as hiking interest rates.

“The measure taken by the Turkish central bank has managed to halt the lira’s depreciation, but that has not been enough to completely clear uncertainty gripping the markets,” wrote Shuji Tonouchi, senior market economist, Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

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

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