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Benchmark JGB yields bounce from near zero on view drop was too fast

·1 min read

TOKYO, July 27 (Reuters) - Japanese government bond yields rose on Tuesday, with those on the benchmark 10-year note climbing from near zero, on the view that the rally in bond prices led by U.S. Treasuries had run too fast.

The 10-year JGB yield rose 0.5 basis point to 0.015%, after brushing against 0.005% for the prior three sessions, from as high as 0.175% as recently as February. It hasn't been at zero since mid-December.

"With U.S. long-term yields also rising yesterday, the high price of bonds has gotten heavy," said a market participant at a Japanese securities firm.

Benchmark 10-year JGB futures fell 0.15 point to 152.26, with a trading volume of 13,921 lots.

The two-year JGB yield rose 0.5 basis point to minus 0.130%, and the five-year yield added 1 basis point to minus 0.125%.

The 20-year yield rose 0.5 basis point to 0.400%, while that on the 30-year JGB was flat at 0.645%.

The 40-year JGB yield rose 1 basis point to 0.740%, despite a smooth auction of new paper.

"There had been concern for months about whether the market could digest 600 billion yen ($5.44 billion) of new paper, but this time too the auction went well, which comes as a relief for the market and should support sentiment," another person at a domestic securities firm said. ($1 = 110.2000 yen) (Reporting by Tokyo markets team; Editing by Subhranshu Sahu)