December 18, 2019 / 4:36 AM / a month ago

Super-long JGB yields rise on govt issuance plan

TOKYO, Dec 18 (Reuters) - Yields on super-long dated Japanese government bonds rose on Wednesday, after sources said the government is considering increasing issuance of 40-year debt next fiscal year.

Japan plans to trim government total bond issuance by 0.5% next fiscal year from current year’s levels, government officials said, according to a Reuters report on Wednesday.

The government is expected to finalise its draft budget for next fiscal year on Thursday.

At the shorter end of the curve, yields rose after an auction of one-year treasury bills drew weak demand from domestic investors.

Some investors avoided making big trades before a Bank of Japan (BOJ) policy meeting ending on Thursday.

No major policy change is expected, but BOJ Governor Haruhiko Kuroda may comment on a recent rise in yields on 10-year bonds, which could help set the tone for fixed-income markets going into next year.

Benchmark 10-year JGB futures rose 0.08 point to 152.2, with a trading volume of 11,185 lots.

The 10-year JGB yield was flat at minus 0.015%.

The 20-year JGB yield rose 1 basis point to 0.295%, while the 30-year JGB yield rose 1.5 basis points to 0.420%.

The 40-year JGB yield rose 2 basis points to 0.440%.

The five-year yield rose 0.5 basis point to minus 0.105%, while the two-year JGB yield rose 0.5 basis point to minus 0.120%. (Reporting by the Tokyo markets team; Editing by Rashmi Aich)

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