February 1, 2018 / 4:30 AM / 10 months ago

JGBs prices slip as stocks' bounce weighs, 10-year auction well received

TOKYO, Feb 1 (Reuters) - Japanese government bond prices slipped on Thursday, weighed by a strong bounce in Tokyo stocks, although losses were limited by a 10-year debt auction that attracted ample demand.

The five-year yield rose 1 basis point to minus 0.075 percent and the 10-year yield climbed 1 basis point to 0.090 percent. A rise above 0.095 percent would take the yield to its highest level since July 2017.

JGB yields have recently risen in tandem with global peers, with bond prices falling on investor expectations for global growth to gather pace and central banks to begin normalising monetary policy.

Thursday’s 2.3 trillion yen ($21 billion) 10-year JGB auction still attracted ample demand with the Bank of Japan seen committed to easy monetary policy for the foreseeable future.

The bid-to-cover ratio, a gauge of demand at auctions, rose to 4.58 at Thursday’s 10-year auction from 3.74 at the previous sale in January.

Japan’s Nikkei share average was up 1.3 percent, posting its first gain in seven days, lifted by a weaker yen and corporate earnings.

$1 = 109.3300 yen Reporting by the Tokyo markets team; Editing by Eric Meijer

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