TOKYO, July 14 (Reuters) - Japanese government bonds (JGBs)
rallied on Tuesday after officials flagged possible changes to
asset allocations of pension funds and as demand increased at a
long-term debt sale.
Here are a few details:
* The benchmark 10-year JGB yield slid 4.5
basis points (bps) to 2.740%. Yields move inversely to bond
prices.
* Finance Minister Satsuki Katayama said the government may
consider adjusting asset allocation in Japan's massive pension
funds if the investment environment changes sharply.
* Health Minister Kenichiro Ueno told a separate press
conference that the ministry will examine reviewing the
Government Pension Investment Fund's (GPIF) asset allocation if
needed, but downplayed the prospect of any near-term changes.
* The Ministry of Finance sold about 700 billion yen ($4.31
billion) in 20-year bonds. The bid-to-cover ratio, a measure of
demand, rose to 4.52, the highest since the sale in April. The
tail, another measure of demand, was 0, the lowest since an
auction in 2010.
* "The outcome was strong, better than forecast," said
Takuya Onozawa, a fixed-income strategist at Mitsubishi UFJ
Morgan Stanley Securities. "The level of the yields is
relatively high, which is why there was strong demand."
* JGBs rallied sharply on Friday after Katayama suggested
that the GPIF and other retirement vehicles could be encouraged
to direct more investments into domestic assets.
* The 20-year yield eased 4.5 bps to 3.7%,
extending its declining streak to three sessions. The 30-year
yield dropped 4.5 bps to 3.860%.
* The two-year yield, the most sensitive to
Bank of Japan policy rates, decreased 1 bp to 1.435%, while the
five-year yield fell 3.5 bps to 1.960%.
($1 = 162.4100 yen)