Japan's super-long bond yields hit 6-week low after smooth auction

Reuters · 05/11/2023 07:06
Japan's super-long bond yields hit 6-week low after smooth auction

- Yields on super-long ended Japanese government bonds (JGBs) fell to a six-week low on Thursday after investors witnessed the firm outcome of an auction for 30-year .

The 20-year JGB yield JP20YTN=JBTC fell 4 basis points (bps) to 0.985%, its lowest level since March 30, and the 30-year JGB yield JP30YTN=JBTC fell 5 bps to 1.210%, also its lowest since March 30.

"The auction was well received. It is clear how much the weakening prospects for the Bank of Japan's (BOJ) policy change affected the outcome, but there seemed to be demand for covering short positions," said a market participant at a domestic brokerage.

The 10-year JGB yield JP10YTN=JBTC fell 2.5 bps to 0.385%, its lowest level since May 1.

"The market was supported by overnight declines in U.S. yields which followed the release of U.S. consumer price data, but investors also reacted to the BOJ's opinion summary of the policy meeting," said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management.

Inadome said board member comments referring to a recent correction of the yield curve raised optimism that the BOJ will immediately have to change its policy.

The BOJ released a summary of opinions at the April policy meeting, which was the first chaired by the governor Kazuo Ueda.

(Reporting by Tokyo markets team;
Editing by Bernadette Baum)