Longer-dated JGBs dip on weaker Treasuries

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TOKYO, Sept 26 – Longer-dated Japanese government bond prices dipped on Wednesday, weighed by weaker U.S. Treasuries and caution over the central bank’s debt-buying operations.

The 30-year yield rose 1 basis point to 0.915 percent.

The 40-year yield edged 1 basis point higher to 1.075 percent, its highest since October 2017.

Super-long JGB yields have risen recently after the Bank of Japan trimmed the amount of longer-date bonds it offered to buy at a regular debt-purchasing operation on Friday.

Wariness towards the BOJ reducing the number of its super-long JGB purchases again at Thursday’s debt-purchasing operation weighed on the super-long sector.

The 400 billion yen ($3.54 billion) 40-year JGB auction on Wednesday still managed to draw sufficient investor demand, with the recent gain in the maturity’s yield seen to have attracted buyers.

The bid-to-cover ratio at the 40-year auction was at 3.24 and roughly in line with 3.38, the average from the past six offerings.

The finance ministry auctions 40-year JGBs every other month.

Treasuries fell in price and their 10-year yield climbed to a four-month peak on Tuesday on bets about Federal Reserve interest rate increases in the coming months and poor demand so far for this week’s supply of government debt.

($1 = 112.9100 yen) (Reporting by the Tokyo markets team, Editing by Sherry Jacob-Phillips)

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