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Wednesday, January 19, 2022

Japanese government bonds gain on auction, US debt

Japanese government bonds gain on auction, US debtTOKYO: Japanese government bond prices rose on Wednesday after an auction of 20-year JGBs attracted decent bids and US bond prices extended gains on falling oil prices and soft US economic data.

The auction of 1.2 trillion yen ($ 9.9 billion) of 20-year JGBs produced a lowest accepted price of 99.80, in line with market expectations of 99.65-99.95.

The results were good enough to prompt short-covering in the futures as many market players had been cautious after many disappointing JGB auctions since January.

The bid-to-cover ratio was 3.42, slightly below the previous auction but near its average in recent months. The 10-year JGB futures extended the day’s gains to 0.40 point to trade at 147.49.

The market was also helped by firmness in US bonds on Tuesday.

The 10-year US debt yield fell to two-week low of 2.038 percent, as oil prices plunged on rise in inventory and US housing starts plunged to one-year low.

The 10-year JGB yield dropped to 0.370 percent , edging near last week’s low of 0.355 percent. The 20-year yield fell to 1.140 percent, its lowest level in almost three weeks.

Copyright Reuters, 2015

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