TOKYO, Nov 4 (Reuters) - Japan's super-long-dated bond
yields jumped on Tuesday, as investors sold the debts to steepen
the curve ahead of a series of auctions of those bonds later
this month.
The 30-year JGB yield rose 5 basis points to
3.09%, and was last at 3.08%. The 40-year JGB yield
rose 4.5 bps to 3.4%.
The spread in yields between the 10-year and 30-year bonds
narrowed the most in five months last week, reversing the trend
of curve steepening, which was driven by weak demand for those
bonds.
The spread rose to a record 170 bps in early September, and
fell to 138 bps on October 30, its lowest since the end of May.
"Investors sold the longer-dated bonds to get better prices
for those bonds at the auctions," said Takashi Fujiwara, chief
fund manager at Resona Asset Management's fixed income
investment division.
The finance ministry auctions 20-year, 30-year, and 40-year
bonds later this month.
Demand for the super-long-dated bonds improved after the
ministry reduced the amount of sales at the auctions earlier
this year to contain rising yields, Fujiwara said.
A sharp rally in Japanese stocks also helped demand for
those bonds as pension funds needed to rebalance their
portfolios, he added.
The 20-year JGB yield rose 3.5 bps to 2.615%.
Yields on shorter-dated bonds also rose, with the 10-year
JGB yield rising 2 bps to 1.675%
The five-year yield rose 2 bps to 1.240%.