JGB prices edge down as Nikkei rally dulls debt appeal

Thursday, 14 Nov 2013 | 9:46 PM ET

TOKYO, Nov 15 (IFR) - Japanese government bond prices inched down on Friday as a slide in the yen buoyed Tokyo shares to six-month highs and somewhat dulled the appeal of fixed-income assets.

A modest rise in U.S. Treasuries overnight had limited positive impact on JGBs, but the Bank of Japan's offer to buy 710 billion yen ($7.1 billion) worth of JGBs in the secondary market with residual maturities of one to five years helped support the market.

The bond-buying programme is part of the central bank's effort to prop up the economy and pull the country out of persistent deflation.

The 10-year yield added 1 basis point to 0.605 percent, while the 10-year JGB futures dipped 3 ticks to 144.99.

Tokyo's Nikkei share average climbed 1.8 percent to above 15,000 for the first time in six months, as the yen tumbled to a two-month low of 100.315 to the dollar.

The yen slide was driven by a risk-on mode in global markets and comments by Finance Minister Taro Aso that Japan must retain currency intervention as a policy tool.

The 20-year JGB yield was up 0.5 basis point at 1.485 percent, while the 30-year yield edged up 1 basis point to 1.635 percent.

The Ministry of Finance is to sell 1.2 trillion yen of 20-year debt next Tuesday.