TOKYO: Yields on Japanese government bonds strengthened on Thursday after a weak demand for an auction prompted investors to sell debt, pushing benchmark 10-year yields to a new high.

The 10-year JGB yield rose 1.5 basis points to 0.220%, its highest since January 2016.

The two-year JGB yield rose 0.5 basis point to minus 0.040%, also the highest in six years, while the 30-year JGB yield jumped four basis points to 0.870%, its highest since November 2018.

The liquidity auction earlier in the day received bids worth 2.01 times the amount available, lower than a bid-cover ratio of 2.07 times at the previous auction.

Japan’s 5-year bond yield scales zero

"The result has triggered a sell-off of futures," said a market participant.

Benchmark 10-year JGB futures fell 0.12 point to 150.08, with a trading volume of 17,899 lots.

The 20-year JGB yield rose 2.5 basis points to 0.650%.

The 40-year JGB yield climbed 3 basis points to 0.905%.

The five-year yield edged up 1 basis point to 0.025%.