US Markets

JGBs fall as risk-averse mood eases after Trump returns to White House

Credit: REUTERS/THOMAS WHITE

Japanese government bond prices dropped on Tuesday as investor risk aversion, triggered on news of U.S. President Donald Trump's COVID-19 infection, eased after he returned to the White House, assuaging fears over political uncertainty.

TOKYO, Oct 6 (Reuters) - Japanese government bond prices dropped on Tuesday as investor risk aversion, triggered on news of U.S. President Donald Trump's COVID-19 infection, eased after he returned to the White House, assuaging fears over political uncertainty.

Benchmark 10-year JGB futures 2JGBv1 fell 0.16 point to 151.92, with a trading volume of 21,214 lots.

The 10-year JGB yield JP10YTN=JBTC rose 1.5 basis points to 0.035%, the highest level unseen since Sept. 11.

In the super-long zone, the 20-year JGB yield JP20YTN=JBTC rose 1 basis point to 0.410%, also marking the highest level since mid-September.

The Ministry of Finance's sale of 30-year JGBs attracted bids 3.51 times the offer of 900 billion yen ($8.52 billion), in line with bid-to-cover ratio of 3.50 at the previous auction in September.

The auction's tail, the gap between the lowest and average prices, slightly narrowed to 0.14 from 0.16 last month.

However, the auction had limited impact to the 30-year JGB yield JP30YTN=JBTC, which rose 1.5 basis points to 0.630%, the highest since July 10.

The 40-year JGB yield JP40YTN=JBTC rose 1.5 basis points to 0.660%, hitting the highest level since July 10.

At the shorter end of the curve, the two-year JGB yield JP2YTN=JBTC rose 1 basis point to minus 0.130%, while the five-year yield JP5YTN=JBTC rose 1.5 basis points to minus 0.100%.

Both yields climbed to the highest levels unseen since mid-September.

Weighing on the bond market was a boost in risk sentiment after President Trump returned to the White House from a three-night hospital stay.

Trump's doctors told reporters the president has not had a fever in more than 72 hours and his oxygen levels are normal, but they declined to discuss any toll the disease could have on Trump's lungs or disclose when he last tested negative for the coronavirus.

($1 = 105.6100 yen)

(Reporting by Tokyo Markets Team, Editing by Sherry Jacob-Phillips)

((eimi.yamamitsu@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More