Japanese government bonds prices fell on Wednesday, as equities rose further with investors’ risk appetite remaining strong on the back of a weaker yen, although a strong liquidity-enhancing auction limited the downside.
The Ministry of Finance sold 600 billion yen ($5.31 billion)of off-the-run JGBs and the auction attracted ample investor interest. The bid-to-cover ratio, a gauge of demand, rose to 3.95 from 3.03 in the previous auction.
The suspension of Mitsubishi UFJ Morgan Stanley Securities as a primary dealer had little impact on the auction.
The MOF said last week that it would suspend the primary dealer status given to Mitsubishi UFJ Morgan Stanley Securities for one month effective July 18, after the company was found to have manipulated prices in 10-year JGB futures.
The five-year JGB yield rose 0.5 basis point to minus 0.105 percent, while the 10-year JGB yield climbed 0.5 basis point to 0.04 percent
The 20-year JGB yield rose 0.5 basis point to 0.485 percent, and the 30-year JGB yield gained 0.5 basis point to 0.68 percent.
The 40-year JGB yield was flat at 0.79 percent.
Japan’s Nikkei share average soared to a more than one-month high as exporters got a boost after the dollar hit a six-month high against the yen.