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JGB Prices Down on Soft Auction, Budget Worries

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TOKYO, Nov 27 Reuters Japanese government bond JGB prices slipped on Friday following mediocre results of twoyear JGB auction and as the Ministry of Finance said market players think they can absorb more 20 and 40year JGBs next fiscal year.

The benchmark 10year yield rose 0.5 basis point to 0.025 , rising above the yield on Portugals 10year bonds. Benchmark 10year JGB futures fell 0.05 point to 152.05, with a trading volume of 21,583 lots.

The auction of twoyear JGBs attracted bids 3.21 times the offer of 3.0 trillion yen 28.87 billion, a smaller bidtocover ratio compared with 3.98times in the previous auction.

Investors also weighed the government increasing bond sales next fiscal year from April, as it started to sound out market players before it compiles the budget plan next month.

A senior official from the Ministry of Finance said on Thursday that market players told a ministry panel meeting that the market can absorb more issues in 20 and 40year tenors.

Japans ruling party will urge the government to lay out a big, decadelong spending programme to promote green investment, while pressing for a shortterm pandemic relief package as well.

The 20year JGB yield rose 0.5 basis point to 0.395 while the 30year JGB yield was flat at 0.650.

The 40year JGB yield rose 0.5 basis point to 0.700.

At the shorter end of the market the twoyear yield rose 0.5 basis point to minus 0.150 while the fiveyear yield rose 0.5 basis point to minus 0.110.

1 103.93 yen

Reporting…

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