JGB Yields Rise on Tepid 5Year Auction, Softer U.S. Bonds

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Japanese government bond yields ticked higher on Tuesday, following a soft fiveyear JGB auction and as U.S. bond yields bounced back sharply from a fourmonth trough as investors braced for a testimony from Federal Reserve Chair Jerome Powell.

The auction of 2.5 trillion yen 22.63 billion fiveyear JGBs on Tuesday drew lacklustre demand, with the tail, or the gap between lowest and average prices, widening to 0.03 from 0.02 in the previous auction.

The fiveyear yield rose 1.5 basis points to minus 0.095, its highest since late May, though traders say there should be decent demand from investors at that level.

The 10year JGB yield rose 1 basis point to 0.050, while the 20year JGB yield added 0.5 basis point to 0.430.

The 30year and the 40year yield were unchanged at 0.670 and 0.740, respectively.

Benchmark 10year JGB futures fell 0.14 point to 151.67 by late afternoon trade.

The 10year U.S. bond yield rose back to 1.490, jumping back from a fourmonth low of 1.354 touched on Monday.

All eyes are on Powell, who is expected to appear before the Congress later in the day. In prepared remarks he noted sustained labour market improvement and the recent increase in inflation.

1 110.46 yen

Reporting by Tokyo Markets Team, Editing by Sherry JacobPhillips

Source Reuters

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