TOKYO: Japanese government bond yields fell on Thursday as a strong outcome at a two-year bond auction lifted sentiment.

The yields on two-year JGBs, which are most sensitive to the Bank of Japan’s (BOJ) policy, fell 1.5 basis points (bps) to 0.355%.

The two-year bond auction received bids worth 5.54 times the amount sold, the highest ratio since January 2019.

“The strong auction results pushed the yields lower today but they could see upward pressure as the BOJ board members are to speak in public by early September,” said Miki Den, senior Japan rate strategist at SMBC Nikko Securities.

“The board members will probably keep the same tone as the BOJ deputy governor.”

JGB rises as BOJ official reiterates readiness to raise rates

BOJ Deputy Governor Ryozo Himino said on Wednesday that the central bank would adjust monetary policy if economic activity and prices are likely to meet projections.

The five-year yield fell 1 bp to 0.495%.

The 10-year JGB yield fell 0.5 bp to 0.885%.

Yields on super long maturities rose, with the 20-year JGB yield rising 2 bps to 1.705% and the 30-year JGB yield climbing 3 bps to 2.075%.

The 40-year JGB yield rose 3.5 bps to 2.335%.