TOKYO – Yields on Japanese government bonds (JGBs) with super-long maturities jumped on Monday as investors turned cautious about a liquidity-enhancing auction in the next session, which will gauge the demand for such bonds.
The 20-year JGB yield rose 3 basis points to 2.275 percent. The 30-year JGB yield rose 5 basis points to 2.76 percent.
“If the market witnesses a positive outcome from the liquidity-enhancing auction, investors will be encouraged to buy bonds with super-long maturities,” said Naoya Hasegawa, chief bond strategist at Okasan Securities.
“The JGBs with those maturities have become cheap now as they were sold off heavily amid high volatilities in bond prices.”
Japan’s finance ministry on Tuesday will hold the auction for the bonds with maturities left between 15.5 years and 39 years.
The yield on 30-year JGBs surged to a 21-year high earlier this month, following a surge in US Treasury yields as investors tried to cash in on a market rout caused by worries about the impact of the US tariffs.
The 10-year JGB yield rose 0.5 bp to 1.29 percent. The five-year yield rose 1 bp to 0.845 percent and the two-year JGB yield rose 0.5 bp to 0.635 percent.
