Wednesday, 18 March 2015 11:24
TOKYO: 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