JGBs gain as rising virus cases hit risk sentiment, 5-year yield revisits Aug low

Credit: REUTERS/THOMAS WHITE

Japanese government bond (JGB) yields dipped on Wednesday, tracking recent falls in global bond yields due to rising concerns about coronavirus infections in Europe and lack of stimulus in the United States.

TOKYO, Sept 23 (Reuters) - Japanese government bond (JGB) yields dipped on Wednesday, tracking recent falls in global bond yields due to rising concerns about coronavirus infections in Europe and lack of stimulus in the United States.

Demand for mid-term bonds was particularly firm, with the five-year JGB yield JP5YTN=JBTC dipping 1.0 basis point to minus 0.130%, matching its two-month trough touched in late July and early August. Markets in Japan were closed on Monday and Tuesday for a public holiday.

The yield has dropped 6.0 basis points so far this month, as investors grew more cautious about the economic outlook.

U.S. and European bond yields have fallen a tad as risk assets came under pressure from concerns about rising COVID-19 cases in Europe.

Investors also remained wary of whether the U.S. Congress could agree on additional measures to support the economy any time soon after many of stimulus programmes have expired.

The market was also bolstered by reinvesting demand from large JGB redemption on Wednesday, said Shinji Ebihara, chief fixed income strategist at Barclays.

About 21.4 trillion yen ($203.63 billion) worth of JGBs is due to mature on Wednesday, the second highest on record.

The benchmark 10-year JGB yield JP10YTN=JBTC dipped 0.5 basis point to 0.005%, a low last seen in early August.

The 20-year yield was flat at 0.390% JP20YTN=JBTC, while the 30-year yield dropped 0.5 basis point to 0.580% JP30YTN=JBTC.

The benchmark December 10-year JGB futures 2JGBv1 rose 0.15 in price to 152.23.

($1 = 105.0900 yen)

(Reporting by Hideyuki Sano; Editing by Rashmi Aich)

((hideyuki.sano@thomsonreuters.com; +81 3 4563 2768;))

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

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