November 14, 2019 / 6:45 AM / 22 days ago

JGBs gain broadly after Nikkei falls on fading trade optimism

TOKYO, Nov 14 (Reuters) - Japanese government bond (JGB) prices gained broadly on Thursday after the country’s stock benchmark dropped to its 1-1/2-week low on doubts whether the United States and China will be able to reach a preliminary trade deal.

Key 10-year JGB futures rose 0.34 point to 153.12, with a trading volume of 30,812 lots.

The 10-year cash JGB yield dropped 2.5 basis points to minus 0.075%.

The two-year JGB yield eased 1 basis point to minus 0.205% and the five-year yield fell 1.5 basis points to minus 0.195%.

Thursday’s 1.9 trillion yen ($17.4 billion) 5-year JGB auction attracted solid investor interest. The auction bid-to-cover ratio, a gauge of demand, rose to 4.03 from 3.69 at the previous sale last month.

In the super-long zone, the 20-year yield fell 2 basis points to 0.295%, while the 30-year and the 40-year yield dropped 2.5 basis points each to 0.445% and 0.475%, respectively.

Japan’s stock benchmark Nikkei average closed at its lowest level in 1-1/2-weeks on Thursday as optimism that the United States and China will reach a deal to remove tariffs faded.

$1 = 109.1000 yen Reporting by the Tokyo markets team

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