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JGB prices edge up after ECB; 10-year yield hits 6-month low

Thursday, 7 Nov 2013 | 9:28 PM ET

TOKYO, Nov 8 (IFR) - Japanese government bond prices edged higher on Friday, with the 10-year yield hitting a six-month low, buoyed by gains in U.S. Treasuries and German Bunds after the European Central Bank unexpectedly cut interest rates.

The 10-year yield was down 0.5 basis point at 0.585 percent after earlier hitting 0.580 percent, its lowest since early May.

Ten-year JGB futures were up 0.06 point at 145.15 after touching a seven-month high of 145.24.

Yields on benchmark 10-year U.S. Treasuries fell 3.8 basis points to 2.6018 percent overnight and the 10-year German Bund yield dropped 5.8 basis points to 1.686 percent, after the ECB cut interest rates to a record low on Thursday and said it could take them lower still to prevent the euro zone's recovery from stalling.

The Bank of Japan, meanwhile, offered to buy 310 billion yen ($3.1 billion) worth of JGBs with residual maturities of between one and more than 10 years, as part of its effort to revive the world's third-largest economy.

Investors were awaiting U.S. nonfarm payrolls data later on Friday for clues on whether the Federal Reserve will scale back its massive stimulus as soon as next month.

Economists in a Reuters survey forecast 125,000 jobs were added in October compared with 148,000 jobs created in September, while the unemployment rate is seen at 7.3 percent, versus 7.2 percent in the previous month.

Both the 20- and 30-year JGB yields slipped 1.5 basis points to 1.460 and 1.610 percent, respectively.