Short- and medium-term JGBs gain after solid 5-year debt auction

April 9 (Reuters) – Short- and medium-term Japanese government bond (JGB) prices rose on Thursday after a five-year debt auction drew solid investor demand.

The bid-to-cover ratio, a gauge of demand, at Thursday’s 1.9 trillion yen ($17.5 billion) five-year JGB sale rose to 4.98 from 2.73 at the previous auction in March.

The auction’s tail, or gap between the lowest and accepted prices, tightened to 0.01 from 0.18 in the previous auction.

As a result, the five-year cash JGB yield fell 1.5 basis points to minus 0.110%.

The result affected short-term maturities. The two-year yield dropped 4 basis points to minus 0.175%.

The key 10-year JGB cash yield stood flat at 0.005%.

The benchmark 10-year JGB futures added 0.01 point to 152.17 in thin trade, with a trading volume of only 11,768 lots.

The super-long zone bucked the trend, with the 20-year cash JGB yield rising 1.5 basis points to 0.330%, while the 30-year yield added one basis point to 0.450%. ($1 = 108.7500 yen) (Reporting by Tokyo Markets Team; Editing by Krishna Chandra Eluri)

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