TOKYO, April 3 (Reuters) – Japanese government bond prices
fell into negative territory on Tuesday after a 10-year auction
result raised worry that investor demand may not be strong at
current yield levels.
Although the auction did drew fairly strong bids, market
talk afterwards was that buying appeared mostly to have come
from brokers wanting to cover short positions, raising worry
about demand from investors, including banks.
The June 10-year JGB futures fell to as low as 141.57
from around 14.80 before the auction result
announcement. The contract last stood at 141.62, down 0.12
point.
“The auction results were not bad. But there’s a question
over whether investors are buying at current levels. Some of
them may wait until the U.S. job payroll data,” said Shunsuke
Doi, market analyst at SMBC Nikko Securities.
The reopened 321st 10-year bonds were sold at a lowest price
of 99.92, above market expectations of 99.87, for a yield of
1.008 percent.
In the secondary market, the yield subsequently rose to
1.020 percent, up 1.5 basis point on the day.
