JGBs rise in line with U.S. Treasuries; 5-year auction sees fair demand

June 18 (Reuters) – Most Japanese government bond (JGB) prices rebounded on Thursday, taking their cues from firmer U.S. Treasuries in Asian trading and weaker global stocks amid fears of a fresh wave of coronavirus infections.

Benchmark 10-year JGB futures rose 0.06 point to 152.12, with a trading volume of 18,670 lots, while the key 10-year cash bond yield fell one basis point to 0.005%.

The five-year cash JGB yield slipped half a basis point to minus 0.115% after Thursday’s 1.9 trillion yen ($17.8 billion) five-year debt auction attracted fair investor interest. The auction bid-to-cover ratio, a gauge of demand, declined to 3.78 from 4.49 at the previous sale last month.

In the super-long zone, the 20-year JGB yield eased half a basis point to 0.385%, while the 30-year and the 40-year yields gained one basis point each to 0.560% and 0.580%, respectively.

U.S. Treasury yields edged down in Asian trading on Thursday, with the key 10-year note yield last trading at 0.708%, compared to Wednesday’s U.S. close of 0.733%.

Weaker global stocks also created a tailwind for the JGBs, with E-Mini futures for the S&P 500 shedding 0.65% and Japan’s benchmark Nikkei dipping 0.45%, as spiking coronavirus cases in some U.S. states and China crushed hopes of a quick economic comeback from the pandemic.

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