JGBs steady as traders weigh policy concerns

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TOKYO — Japanese government bond yields saw little movement on Wednesday as the Ministry of Finance auctioned 10-year and 20-year notes and traders weighed the implications of higher-than-expected U.S. inflation on Federal Reserve policy.

The 10-year JGB yield was flat at 0.230%. The 20-year JGB yield fell 0.5 basis point to 0.905%.

“Government bonds were bought in the U.S. because the Federal Reserve will aggressively tighten monetary policy in response to Wednesday’s CPI report, so the economy is expected to slow down,” said Makoto Suzuki, a senior strategist at Okasan Securities.

“Japanese government bonds are holding relatively firm today in line with that.”

Benchmark 10-year JGB futures rose 0.02 point to 149.28, with a trading volume of 10,233 lots.

There was slightly more movement in longer-term bonds. The 30-year JGB yield fell 1 basis point to 1.250%, and the 40-year JGB yield fell 1.5 basis points to 1.425%.

The two-year JGB yield is yet to be traded today.

The five-year yield rose 0.5 basis point to 0.025%. (Reporting by Sam Byford and Tokyo markets team; Editing by Amy Caren Daniel)

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