TOKYO, May 10 (Reuters) - Japanese government bond (JGB)
yields rose on Friday amid a tepid auction for 30-year bonds, as
investors continued to search for appropriate levels following
hawkish Bank of Japan (BOJ) minutes.
The 10-year JGB yield, which moves inversely
to bond prices, ticked up 0.5 basis point (bp) to 0.910% after
the auction results were published.
The 30-year JGB yield climbed 2.5 bps to
1.995%.
Numbers showed weak demand for the super long-term bond,
with an auction tail, the gap between the lowest and average
price, of 0.30 yen. That was considerably larger than the
previous month's 0.13 yen.
The bid-to-cover ratio was somewhat lower at 3.25 versus
3.47 in April, also indicating less appetite.
The auction comes a day after the BOJ released a summary of
opinions from its April meeting, which showed some board members
saw the chance of interest rates rising faster than anticipated.
The summary also included mention of possible reductions to
the central bank's bond-buying amounts in the future.
"That hurt appetite for bonds," said Yoshiro Sato, an
economist at Resona Holdings.
"Expectations that the BOJ would maintain the current
purchase amount was a support for the market."
JGB investors have been watching closely for indications
that the BOJ could cut purchases. The bank has been an
aggressive bond buyer to defend its ultra-low rate policy, and
it owns about half of the entire market.
Many market players expect the BOJ to hike rates later this
year, with some estimating that move could come as soon as July.
Views are divided on how much more the central bank will
hike after that.
The two-year JGB yield, which is highly
sensitive to the BOJ's policy, edged up 0.5 bp to a two-week
high of 0.315%.
The five-year yield rose 0.5 bp to 0.520%.
The 20-year JGB yield was up 1.5 bps at
1.695%.