JGB yields rise tracking Treasuries after Fed minutes

TOKYO, Aug 20 (Reuters) – Yields on Japanese government bonds (JGBs) gained on Thursday, in line with U.S. Treasuries which rose after minutes of July’s Federal Reserve meeting showed that yield caps or targets were not on the horizon.

Benchmark 10-year JGB futures fell 0.04 point to 151.91, with a trading volume of 13,250 lots, while the 10-year JGB yield added half a basis point to 0.030%.

The 20-year JGB yield was up 1 basis point to 0.425%, while the 30-year JGB yield inched up half a basis point to 0.605%.

The 40-year JGB yield was unchanged at 0.630%.

At the shorter end of the curve, the two-year JGB yield rose half a basis point to minus 0.120%, while the five-year yield stood flat at minus 0.090%.

The Fed minutes from July 28-29 meeting indicated many Fed policymakers were determined that yield caps or targets were “not warranted” at this time but should remain an option for the future.

Japan’s finance ministry conducted 2.5 trillion yen ($23.57 billion) five-year debt auction on Thursday, which attracted fair investment demand. The bid-to-cover ratio, a gauge of demand, was at 3.55.

The auction’s tail, or the gap between the lowest and average prices was 0.01, unchanged from last month’s sale. ($1 = 106.0700 yen) (Reporting by Tokyo Markets Team; editing by Uttaresh.V)

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