JGB yields meander as BOJ chief fails to provide policy hints

By Kevin Buckland

TOKYO, Nov 18 (Reuters) - Japanese government bond yields fluctuated in narrow ranges on Monday as a closely watched speech and subsequent news conference by Bank of Japan Governor Kazuo Ueda failed to provide fresh clues on the pace of interest-rate hikes.

The 10-year JGB yield was flat at 1.070% as of 0542 GMT, after initially rising to 1.08% and then retreating to 1.065%.

Benchmark 10-year JGB futures rose 0.03 yen to 142.85, after alternating between small gains and losses during the session.

During a speech in the Japanese morning and a news conference in the afternoon, Ueda reiterated the BOJ's readiness to keep increasing borrowing costs if the economy behaved in line with its forecasts. But he warned of the need to scrutinise external risks such as uncertainty over the economic outlook in the United States and the still-jittery financial markets.

The lack of clear guidance puts the near-term focus on an auction of 20-year JGBs on Thursday, said Shoki Omori, chief Japan desk strategist at Mizuho Securities.

Solid demand at the sale would lead to a "bear flattening bias," Omori said, referring to a phenomenon where short-term yields rise faster than longer-term yields.

The 20-year JGB yield rose 1 basis point (bp) to 1.895%. The 30-year JGB yield added 0.5 bp to 2.300%.

The two-year JGB yield was flat at 0.55%. The five-year yield fell 0.5 bp to 0.700%. (Reporting by Kevin Buckland; Editing by Janane Venkatraman)