TOKYO, June 13 (Reuters) - Japanese government bonds
(JGBs) rose on Friday as investors bought safe-haven assets
after Israel said it attacked Iranian nuclear targets, stoking
geopolitical worries.
The 10-year JGB yield fell to as low as
1.385%, its lowest since May 12. It was last at 1.41%, 4.5 basis
points (bps) lower than on Thursday.
Yields move inversely to prices.
"The yields fell sharply after the news about Israel's
attack," said Miki Den, a senior Japan rate strategist at SMBC
Nikko Securities.
Early on the day, Israel said it had struck Iranian nuclear
targets to prevent Tehran from developing atomic weapons, with
Iranian media and witnesses reporting explosions, including at
the country's main uranium enrichment facility.
The demand for safe-haven assets was a tailwind for
super-long JGBs, which have struggled to attract investors at a
series of auctions in the past few weeks.
The 20-year JGB yield fell 3.5 bps to 2.36%.
On Thursday, the outcome of the finance ministry's liquidity
enhancement auction for bonds with maturities between 15.5 and
39 years worsened from a similar auction in April.
But Japanese Government Bond #13, which has a maturity of 35
years, and #85, with a maturity of nearly 30 years, were among
the few tenors that got the highest bids, the finance ministry
said.
SMBC Nikko's Den said there was a demand from investors to
cover short positions of super-long bonds.
"They made short positions on those bonds, but then wanted
to buy them back after seeing news that signalled the finance
ministry's willingness to improve demand," said Den.
The yields on super-long bonds hit record highs in May but
were on the decline after Reuters reported last month that
Japan's finance ministry was considering reducing their sale.