Ten-year JGBs untraded for record third straight session


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TOKYO — Japan’s 10-year government bonds were untraded for a third session in a row so far on Tuesday, on course to set a record despite upward pressure from overseas peers, while nine-year bond yields hit a two-week high.

The 10-year JGB yield were flat at 0.245%, just below the Bank of Japan’s upper end of the target yield of 0.25%.

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The BOJ has been spending trillions of yen to hold the ceiling on the 10-year Japanese government bond yield as it keeps an ultra-low rate policy to support the economy, going against the global tide of tightening to contain inflation.

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If the 10-year bonds remain untraded by the end of the session, it would be the first such occasion since newly issued 10-year bonds became the benchmark in 1999.

“Japan’s 10-year bonds have gotten expensive because yields on other notes have risen. No one is interested in trading such bonds,” said Kazuhiko Sano, chief strategist at Tokai Tokyo Securities.

“The market in a very unusual situation.”

Yields on nine-year bonds maturing in September 2031, which are outside the BOJ’s target for controlling yield movement, rose to as much as 0.285%, its highest since Sept. 30.

Longer-term U.S. Treasury yields shot higher in Asia on Tuesday, as bonds globally were sideswiped by a headlong rout in the UK gilts market amid fears pension funds were being forced into fire sales of assets.

The 30-year JGB yield jumped 7 basis points to 1.430% ahead of an auction for the same maturing in the next session.

The 20-year JGB yield rose 4.5 basis points to 1.015%.

The two-year JGB yield rose 0.5 basis point to -0.065%.

The five-year JGBs did not trade and the yield was flat at 0.045%.

The 40-year JGBs did not trade and the yield stayed at 1.550%.

Benchmark 10-year JGB futures fell 0.37 point to 148.25, with a trading volume of 12,411 lots. (Reporting by Junko Fujita; Editing by Savio D’Souza)


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