May 15, 2020 / 7:28 AM / 13 days ago

Mid-to-long dated JGB yields rise on concerns over debt issuance

TOKYO, May 15 (Reuters) - Mid-to long- dated Japanese government bond yields rose on Friday due to growing concerns about the country’s plan on a second extra budget and a probable increase in government debt issuance to finance its stimulus.

Prime Minister Shinzo Abe lifted the state of emergency in 39 of Japan’s 47 prefectures on Thursday, with the exception of Tokyo and other major cities where the novel coronavirus is yet to be contained.

To combat against the economic fallout from the pandemic, the Japanese government said it would work on a second extra budget draft, scheduled to be decided around May 27.

Benchmark 10-year JGB futures rose 0.01 point to 152.29, with a trading volume of 12,906 lots, while the 10-year JGB yield rose 0.5 basis point to minus 0.005%.

In the longer end of the curve, the 30-year JGB yield and the 40-year JGB yield rose 2 basis points each to 0.475% and 0.490%, respectively, while the 20-year JGB yield rose 1.5 basis points to 0.345%.

As for the short-term JGBs, the two-year JGB yield and the five-year yield were unchanged at minus 0.170% and minus 0.120%, respectively.

The BOJ bought 370 billion yen of five-to-ten year JGBs, the same amount as its previous operation.

The benchmark Nikkei average rose 0.6%, after falling for three sessions in a row. (Reporting by Eimi Yamamitus; Editing by Rashmi Aich)

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