July 12, 2018 / 6:14 AM / 2 months ago

Super-long JGBs firm after solid 20-yr auction

TOKYO, July 12 (Reuters) - Super-long Japanese government bond prices firmed slightly on Thursday after an auction of 20-year JGBs attracted solid demand despite their yields staying near 1 1/2-year lows.

Shorter maturities were softer as local equities were in demand as a weaker yen offered a temporary respite to trade war fears, reducing the allure of safe-haven debt.

The auction of 1.0 trillion yen ($8.91 billion) 20-year bonds attracted ample investor interest, with the bid-to-cover ratio, a gauge of demand, rising to 4.54 from 4.23 in the previous auction.

The tail, or the gap between the lowest and accepted prices, shrank to 0.03 from 0.08 in the previous auction.

The 164th 20-year JGB yield was flat at 0.480 percent, near its 1 1/2-year low of 0.470 percent touched last week, while the newly-issued 165th 20-year JGBs yield dipped to 0.490 percent compared to the average yield at the auction of 0.492 percent.

The 30-year JGB yield fell 0.5 basis point to 0.685 percent.

On the other hand, the 10-year JGB yield rose 0.5 basis point to 0.040 percent while the benchmark 10-year JGB futures price was flat at 150.92.

The Nikkei share average soared 1.3 percent to 22,218.45. ($1 = 112.25 yen) (Reporting by the Tokyo markets team; Editing by Sunil Nair)

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