JGB yields fall after moderately strong auction outcome

April 06, 2023 04:26 PM AEST | By Reuters
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TOKYO, April 6 (Reuters) - Japanese government bond yields fell on Thursday, with sentiment underpinned by a moderately strong outcome of an auction for 30-year bonds.

The 30-year JGB yield fell 3 basis points (bps) to 1.310% and the 20-year JGB yield fell 1.5 bps to 1.090%.

The auction received bids worth 3.19 times the amount sold, higher than a ratio of 3.0 times at the previous auction, which market participants found relatively strong.

The 40-year JGB yield fell 1.5 bps to 1.550%.

The 10-year JGB yield was flat at 0.465%, rebounding from 0.460% earlier in the session.

"It is not clear whether or not the BOJ will tweak the policy at its April meeting," said Makoto Suzuki, a senior strategist at Okasan Securities.

"It seems that investors find the yield below 0.5% for the 10-year JGBs is too low."

Market participants speculate that the Bank of Japan (BOJ) could tweak or end its yield curve control, under which it contained the 10-year bond yield below 0.5%, when incoming Governor Kazuo Ueda takes the helm from Haruhiko Kuroda.

The BOJ's first policy meeting chaired by Ueda will be held on April 27-28.

Yields on shorter-ended notes also retreated, with the five-year yield slipping 1 bp to 0.145% and the two-year JGB yield falling 0.5 bp to -0.040%.

Benchmark 10-year JGB futures rose 0.05 yen to 147.56, with a trading volume of 12,010 lots. (Reporting by Tokyo markets team; Editing by Varun H K)


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