JGBs steady to slightly weaker as equities rise

TOKYO, June 3 (Reuters) – Japanese government bond prices were steady to slightly lower on Wednesday, as a rise in equities reduced the appeal of safe-haven assets.

Local stocks rallied to a more than three-month high on Wednesday, underpinned by a weaker yen and a jump in automaker stocks.

Some investors also remained on the sidelines ahead of an auction of 700 billion yen ($6.44 billion) worth of 30-year JGBs on Thursday.

Benchmark 10-year JGB futures fell 0.14 point to 152.05 on Wednesday, with a trading volume of 18,126 lots, while in the cash bond market, the 10-year JGB yield inched up half a basis point to 0.010%.

At the shorter end of the market, the five-year yield gained 1 basis point to minus 0.125%, while the two-year JGB yield stood flat at minus 0.170%.

In the super-long zone, the 20-year JGB yield added half a basis point each to 0.360%, while the 30-year JGB yield was unchanged at 0.515%.

Bucking the trend, the 40-year JGB yield dipped half a basis point to 0.550%.

While the Bank of Japan reduced the size of its 3-5 year JGBs purchase to 320 billion yen from 350 billion on Wednesday, analysts said the move was within expectations.

The central bank kept the size of its purchase of 10-25 year JGBs at 120 billion yen. ($1 = 108.6800 yen) (Reporting by Eimi Yamamitsu; Editing by Aditya Soni)

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