JGB yields rise as trade optimism grows, BOJ cuts buying of long-dated bonds

Credit: REUTERS/Thomas White

Japanese government bond yields rose across maturities on Tuesday, the first trading session after a long weekend, helped by optimism about progress in U.S.-China trade talks and as the Bank of Japan reduced purchase of the super-long debt.

TOKYO, Nov 5 (Reuters) - Japanese government bond yields rose across maturities on Tuesday, the first trading session after a long weekend, helped by optimism about progress in U.S.-China trade talks and as the Bank of Japan reduced purchase of the super-long debt.

Benchmark 10-year JGB futures 2JGBv1 fell 0.51 point to 153.89, with a trading volume of 27,823 lots.

The 10-year cash JGB yield JP10YTN=JBTC rose 5 basis points to minus 0.135%.

In the super-long zone, the 20-year yield JP20YTN=JBTC climbed 3 basis point to 0.220% and the 30-year yield JP30YTN=JBTC rose 2.5 basis point to 0.365%.

The Bank of Japan (BOJ) reduced its purchase of JGBs with 10 to 25 years to maturity to 100 billion yen ($920 million), from 120 billion yen previously, in an effort to put a floor under the declining yields.

At the shorter end of the curve, the two-year yield JP2YTN=JBTC gained 2.5 basis points to minus 0.250%, while the five-year yield JP5YTN=JBTC rose 3.5 basis points to minus 0.275%.

Japan's benchmark Nikkei share average .N225 climbed 1.8% to 13-month highs on Tuesday as fresh hopes for a U.S.-China trade deal and upbeat Wall Street stocks lifted investor sentiment. .T

The Financial Times reported on Tuesday that the United States is considering dropping some tariffs on China.

The story came after Beijing and Washington spoke of progress in trade talks on Friday and U.S. Commerce Secretary Wilbur Ross said licenses for U.S. companies to sell components to China's Huawei Technologies will come "very shortly".

($1 = 108.7600 yen)

(Reporting by the Tokyo Markets Team; Editing by Aditya Soni)

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