TOKYO, May 26 (IFR) - The price of the benchmark Japanese government bond edged slightly lower in extremely quiet trade on Monday, even as some dip-buying emerged to support the superlong sector.
The yield on the current 10-year JGBs added 0.5 basis point from last Friday to 0.590 percent, which matched Friday’s extended afternoon session close.
The 30-year yield was flat on the day at 1.690 percent. Earlier, the current 20-year JGBs were modestly lower, sending its yield up 1 basis point from Friday’s level of 1.455 percent, as the Bank of Japan did not offer to buy any JGBs in that zone on Monday under its massive asset buying programme.
The BOJ offered to buy 400 billion yen ($3.93 billion) in the 5-year to 10-year tenor, in addition to 20 billion yen in 10-year inflation-linked JGBs.
Superlong JGBs recovered from their earlier modest losses due to sporadic dip-buying demand from a few investors, market participants said.
The superlong zone was resilient despite caution ahead of Tuesday’s quarterly auction of 400 billion yen of 40-year JGBs. The Ministry of Finance will extend the maturity of the new 40-year bonds for the first time since February 2013 by one year to March 2054.
JGB investors widely expect the BOJ to buy some superlong JGBs on Wednesday, after the 40-year auction.
Ten-year lead June JGB futures ended the morning session down 0.02 point at 145.24. They rose to 145.29 in early afternoon trade.
JGBs lacked directional cues from U.S. Treasuries ahead of a U.S. markets closure to observe the Memorial Day holiday. UK markets will also shut on Monday for the Spring bank holiday. ($1 = 101.8250 Japanese Yen) (Reporting by Masatsugu Hisatsune; Editing by Richard Borsuk)