July 18, 2014 / 3:30 AM / in 4 years

JGBs steady as fresh debt supply offsets U.S. bond rise

TOKYO, July 18 (IFR) - Japanese government bond prices were little changed on Friday, rising early on an overnight surge in U.S. Treasuries and weaker Tokyo shares, but handing back gains as the market braced for a fresh supply of debt.

The benchmark 10-year JGB yield stood unchanged at 0.530 percent after initially dipping to 0.510 percent.

September 10-year JGB futures was also flat on the day, at 145.93 after rising to 146.00 earlier in the session.

The Ministry of Finance offered 270 billion yen ($2.67 billion) of five-year JGBs on Friday. Traders expect the new JGBs to be relatively well received by investors although the coupon on the new debt was set at 0.1 percent, the lowest since March 2013.

U.S. Treasury prices rose on Thursday as investors sought a safe haven after news a Malaysian passenger plane came down over eastern Ukraine, an area of increasing conflict between the government and pro-Moscow rebels.

Japan’s Nikkei share average dropped to a one-week low on Friday morning and posted its biggest one-day fall in two months as investors turned risk averse after the Malaysian airliner news.

$1 = 101.3000 Japanese Yen Reporting by Masatsugu Hisatsune; Editing by Jacqueline Wong

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