JGBs gain as virus spreads; 40-yr yield at 5-month low

TOKYO, Feb 21 (Reuters) – Japanese government bond prices gained on Friday, with the 40-year bond yield hitting a five-month low, as investors rushed to the safety of bonds globally amid signs the coronavirus epidemic is spreading beyond China.

Benchmark 10-year JGB futures advanced 0.26 point to 152.90, with a trading volume of 25,910 lots.

The 10-year JGB yield dropped 2 basis points to minus 0.065%.

The 20-year JGB yield fell 1.5 basis points to a three-week low of 0.220%, while the 30-year JGB yield fell 1.5 basis points to 0.340%.

The yield on 40-year JGBs fell 1.5 basis points to 0.360%, a level last seen in mid-September.

The BOJ maintained the size of its bond buying at its operation on Friday, buying one- to 10-year bonds. The outcome of the BOJ purchase underscored the limited selling interest from traders.

At the shorter end of the market, the two-year JGB yield fell 1 basis point to minus 0.165%.

The five-year yield fell 2 basis points to minus 0.165%.

The market drew strength from the rise in U.S. bonds amid mounting worries about the coronavirus outbreak. The 10-year U.S. Treasuries yield dropped 3.5 basis points to 1.490% in Asian trade to the lowest price since September. (Reporting by Tokyo Markets Team; Editing by Sherry Jacob-Phillips)

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