JGBs falter on improved investors’ risk sentiments; steady 10-year bond demand cushion losses

The Japanese government bonds faltered during Asian session Tuesday as investors’ risk sentiments improved, although the steady demand from the latest 10year auction held early today, helped to cushion further losses.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 0.04 percent, the yield on the long-term 30-year note climbed nearly 1-1/2 basis points to 0.74 percent and the yield on short-term 2-year traded tad higher at -0.12 percent by 04:45 GMT.

Tuesday’s JPY2.2 trillion (USD20.17 billion) 10-year JGB auction attracted demand from investors, with the Bank of Japan (BoJ) expected to conduct a regular debt-purchasing operation on Wednesday focusing on bonds of longer-dated maturities.

The bid-to-cover ratio, a gauge of demand, at the 10-year sale rose to 4.20 from 4.16 at the last sale in April.

Meanwhile, Japan’s benchmark Nikkei 225 stock index continued to gain, buoyed by rise in tech stocks, trading 0.16 percent higher at 22,502.50 by 05:05 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 67.21 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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