Japan government bond yields fall to seven-and - a-half month low


TOKYO, Aug 4 - Japanese government bond yields fell on Wednesday with the 10-year yield touching a seven-and-a-half month low of zero percent, supported by concerns over the Delta variant and strong results of the Bank of Japan's bond buying operation.

An auction of 2.6 trillion yen 10 year JGBs on Tuesday attracted decent demand even as the yield stood near its lowest levels so far this year, rendering a support for the market.

Yesterday's auction confirmed there is reasonable demand even with the yield of 0.01%. But there is a wall before moving into fresh levels, and I think that we need new catalysts to happen, said Ataru Okumura, strategist at SMBC Nikko Securities.

The JGB yield fell 0.5 basis point to 0.000% in 10 years, touching zero percent for the first time since Dec. 16. There was no trade in the benchmark issue on Tuesday, the first time it has been played in 2 months.

At the longer end, the 20 - year JGB yield dropped 1 basis point to 0.370%, also a seven-and-a-half month low, while the 30-year yield was 0.55 basis point to 0.625%.

The 5-year yield fell 0.5 basis point to -0.335%, a low seen in September last year.

On Wednesday the BOJ bought JGBs into three maturity categories, those with one to three years, three to five years and 10 to 25 years to maturity.

Its buying in the three to five year zone produced particularly strong results, market players said.