JGB yields gain after tepid demand for 20-year note auction

BY Reuters | TREASURY | 09/16/21 02:54 AM EDT

TOKYO, Sept 16 (Reuters) - Japanese government bond yields rose on Thursday after an auction for 20-year notes received tepid demand, while overnight gains in U.S. Treasury yields weighed on sentiment.

The 10-year JGB yield rose 1 basis point to 0.040%, while the 20-year JGB yield climbed 0.5 basis point to 0.420%.

Earlier in the day, the government auction for 20-year notes received bids worth 3.2 times the amount sold, lower than a bid-cover-ratio of 3.65 times at the previous auction.

The 30-year JGB yield also rose 0.5 basis point to 0.650%, but the 40-year JGB yield was flat at 0.720%.

Shorter-term note yields also rose, with the two-year JGB yield gaining 0.5 basis point to minus 0.130% and the five-year yield rising 0.5 basis point to minus 0.105%.

Benchmark 10-year JGB futures fell 0.08 point to 151.78, with a trading volume of 24,292 lots. (Reporting by Tokyo markets team; Editing by Sherry Jacob-Phillips)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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