JGBs steady after 5-year sale as investors await Fed move
TOKYO, Dec 12 (Reuters) - Japanese government bonds were steady on Tuesday, underpinned by solid demand at a sale of five-year JGBs as investors awaited the next session’s U.S. monetary policy decision for directional cues.
The benchmark 10-year cash JGB yield unchanged on the day at 0.045 percent, and 10-year JGB futures were up 0.03 point at 150.93 in afternoon trade.
Overall, bond market participants took a wait-and-see stance ahead of the Federal Reserve’s monetary policy decision on Wednesday. The U.S. central bank is widely expected to raise interest rates, with Fed funds futures also pricing in about a 60 percent implied chance for a March rate increase.
The 5-year JGB yield was steady at minus 0.120 percent.
The Ministry of Finance offered 2.2 trillion yen ($19.38 billion) of 5-year JGBs with a 0.10 percent coupon. Some 83.4736 percent of the bids were accepted at the lowest price of 101.02.
The sale drew bids of 4.38 times the amount offered, up from the previous sale’s bid-to-cover ratio of 4.19 times, suggesting stronger demand.
The ministry will offer 1.0 trillion yen 20-year JGBs on Thursday.
On Tuesday, the 20-year yield was flat on the day at 0.565 percent, while the 30-year yield was also flat at 0.815 percent.
Data released earlier on Tuesday showed Japan’s wholesale prices rose an annual 3.5 percent in November, the fastest rate in nine years, in a sign that rising global commodity costs were driving up corporate expenses.