December 7, 2018 / 5:47 AM / 4 days ago

Yields on super-long JGBs tick up, curve deepens

TOKYO, Dec 7 (Reuters) - Yields on super-long Japanese government bonds edged higher on Friday ahead of the auction next week, while their shorter peers were mostly stable due to firmer U.S. bonds, leading to a steepening of the yield curve.

The yield on 40-year JGBs, the longest maturity, climbed 2 basis points to 0.960 percent, while the 30-year rose 1.5 basis points to 0.800 percent.

The finance ministry plans to offer 700 billion yen of 30-year bonds next Tuesday.

Dealers said Thursday’s liquidity-enhancing auction, in which the ministry sold an additional amount of existing super-long issues, drew tepid demand, which weighed on the market.

The 20-year yield rose half a basis point to 0.570 percent, extending its rebound from Wednesday’s four-month low of 0.545 percent.

Shorter maturities were supported, taking cues from firmer U.S. Treasuries on the back of speculations that the U.S. Federal Reserve could be “one-and-done” with rate hikes.

The benchmark 10-year yield was unchanged at 0.050 percent, after hitting a 3-1/2-month low of 0.040 percent previous day.

Ten-year JGB futures were flat at 151.65. (Reporting by Tokyo Markets Team; Editing by Sherry Jacob-Phillips)

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