October 15, 2019 / 4:56 AM / a month ago

JGBs dip, trade anxiety supports long-dated bonds

TOKYO, Oct 15 (Reuters) - Japanese government bond prices sagged on Tuesday, in line with retreating global bond prices, after the United States and China appeared to have struck a tentative deal last week to avoid immediate tariff rate hikes.

However, the lack of details on the agreement between the world’s two largest economies have led many investors to stay cautious about the global economic outlook, underpinning demand for bonds.

The Bank of Japan maintained the amount of its bond buying on Tuesday as expected, buying 420 billion yen ($3.88 billion) of one- to three-year JGBs, 340 billion yen of three- to five-year bonds and 350 billion yen of five- to 10-year bonds.

Benchmark 10-year JGB futures dipped 0.10 point to 154.51, while the yield on the benchmark 10-year JGBs rose 0.5 basis point to minus 0.180%.

The two-year JGB yield rose 1 basis point to minus 0.285%, highest in almost a month, while the five-year yield rose 1 basis point to minus 0.305%, a two-week high.

The longest end of the yield curve fared better, enjoying steady demand from investors as the only source of positive yield in the market.

The 20-year JGB yield was flat at 0.210%, while the 30-year JGB yield dipped 0.5 basis point to 0.380%.

The 40-year JGB yield fell 0.5 basis point to 0.425%.

$1 = 108.32 yen Reporting by Tokyo Markets Team, Editing by Sherry Jacob-Phillips

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