December 30, 2019 / 5:09 AM / 23 days ago

JGBs up slightly but end quarter with biggest loss in 3 yrs

TOKYO, Dec 30 (Reuters) - Japanese government bonds ticked higher on Monday on their last trading session of 2019, taking cues from a fall in domestic share prices, but they look set to end the quarter with the biggest loss in three years.

By mid-afternoon trade, the benchmark 10-year JGB futures rose 0.10 point to 152.16, with a thin trading volume of 8,124 lots, as fall in Japanese shares helped to underpin the safety of bonds.

The 10-year JGB yield fell 0.5 basis point to minus 0.020%.

Still, although the yield had fallen to a three-year low of minus 0.295% in September on concerns about escalating trade tensions between the United States and China, it has risen back steadily as the two economic powers have tried to mend their ties.

The yield stood almost flat from where it was at the end of last year — of minus 0.015%.

Easing fears over U.S.-China trade frictions and ebbing investor demand for low-risk low-return assets such as bonds hit JGBs this quarter.

Nomura BPI, widely used Japanese bond index, has a drawdown of 1.18% so far this quarter until Friday, the worst performance since the last quarter of 2016.

The 20-year JGB yield fell 1 basis point to 0.280% while the 30-year yield fell 0.5 basis point to 0.420%.

At the shorter end, the two-year JGB yield and the five-year yield were both flat at minus 0.125% minus 0.120% respectively. (Reporting by Hideyuki Sano; Editing by Shailesh Kuber)

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