Most JGB yields flat after 30-year note auction

BY Reuters | TREASURY | 10/12/21 02:12 AM EDT

TOKYO, Oct 12 (Reuters) - Most Japanese government bond yields were flat on Tuesday after a moderately solid outcome of an auction for 30-year notes and as investors stayed cautious over rising U.S. Treasury yields.

The 10-year JGB yield was flat at 0.09%, while the 20-year JGB yield was unchanged at 0.47%.

The auction received bids worth 2.9 times the amount sold, lower than a book-cove-ratio of three times at the previous auction.

The outcome was seen as "moderately solid" but it did not drive investors to place active bids because they were cautious about rising U.S. yields, a market participant said.

Two-year Treasury yields leapt to a more than 18-month high during Asian trade, while the 10-year yield has now climbed about 30 basis points in three weeks. U.S. bond markets were closed on Monday for a holiday.

In Japan, the 30-year bond yield rose 0.5 basis point to 0.7%, while the 40-year yield was flat at 0.78%.

The five-year bond yield was flat at minus 0.08%, while the two year bond yield was unchanged at minus 0.12%.

Benchmark 10-year JGB futures rose 0.05 point to 151.25.

(Reporting by Tokyo markets team; Editing by Subhranshu Sahu)

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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