JGB prices edge up after ECB; 10-year yield hits 6-month low

Reuters

TOKYO, Nov 8 (IFR) - Japanese government bond prices edgedhigher on Friday, with the 10-year yield hitting a six-monthlow, buoyed by gains in U.S. Treasuries and German Bunds afterthe European Central Bank unexpectedly cut interest rates.

The 10-year yield was down 0.5 basis point at0.585 percent after earlier hitting 0.580 percent, its lowestsince early May.

Ten-year JGB futures were up 0.06 point at 145.15after touching a seven-month high of 145.24.

Yields on benchmark 10-year U.S. Treasuries fell3.8 basis points to 2.6018 percent overnight and the 10-yearGerman Bund yield dropped 5.8 basis points to1.686 percent, after the ECB cut interest rates to a record lowon Thursday and said it could take them lower still to preventthe euro zone's recovery from stalling.

The Bank of Japan, meanwhile, offered to buy 310 billion yen($3.1 billion) worth of JGBs with residual maturities of betweenone and more than 10 years, as part of its effort to revive theworld's third-largest economy.

Investors were awaiting U.S. nonfarm payrolls data later onFriday for clues on whether the Federal Reserve will scale backits massive stimulus as soon as next month.

Economists in a Reuters survey forecast 125,000 jobs wereadded in October compared with 148,000 jobs created inSeptember, while the unemployment rate is seen at 7.3 percent,versus 7.2 percent in the previous month.

Both the 20- and 30-year JGB yields slipped 1.5 basis points to 1.460 and 1.610percent, respectively.

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