JGB prices slip, sending benchmark yield to 2-week high


TOKYO, Oct 11 (IFR) - Japanese government bond prices weremostly weaker on Friday, with the 10-year yield hitting atwo-week high, as hopes of a breakthrough in the U.S. fiscal logjam buoyed Tokyo shares and other risky assets.

Losses were limited, however, as the Bank of Japan (BOJ)offered to buy 600 billion yen ($6.1 billion) worth of JGBs withresidual maturities of five to more than 10 years, as part ofits drive to revive the world's third-largest economy.

The 10-year yield added 0.5 basis point to0.655 percent after earlier rising to as much as 0.665 percent,its highest since Oct. 1. It is up 0.5 basis point so far thisweek, on track to snap a four-week decline.

By contrast, the Nikkei share average climbed 1.3percent to a more than one-week high.

U.S. Republicans offered a plan to President Barack Obama onThursday that would postpone a possible U.S. default in a signthat the two sides may be moving to end the standoff that hasshuttered large parts of the government and thrown America'sfuture creditworthiness into question.

No deal emerged from a 90-minute meeting at the White House,but the two sides said they would continue to talk. It was thefirst sign of a thaw in a political crisis that has weighed onfinancial markets and knocked hundreds of thousands of federalemployees out of work.

Yields on longer-dated JGBs also rose, with the 30-year debt up 1 basis point to 1.635 percent.

The five-year yield was up 0.5 basis point at0.230 percent, while the 10-year JGB futures slipped0.05 point to 144.34.

Earlier, data from the BOJ showed Japanese wholesale pricesin September rose 2.3 percent from a year earlier.

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