JGB yields dip on moderation in U.S. inflation

Market trading boards are seen at the Australian Securities Exchange in Sydney, Friday, February 9, 2018. ( AAP Image/Ben Rushton) NO ARCHIVING

TOKYO, Aug 12 (Reuters) – Japanese government bond (JGB) yields dipped on Thursday after a slight moderation in U.S. consumer prices cemented expectations that a spike in inflation is likely to prove transient, allowing the Federal Reserve to keep interest rates low for longer.

Benchmark 10-year JGB futures price rose 0.13 point to 152.17, on course to snap their four-day losing streak and bouncing back from a five-week low.

The 10-year JGB yield fell 1 basis point to 0.025%, off one-month high of 0.035% touched on Wednesday, while the 20-year yield also eased 0.5 basis point to 0.405%.

The market took cues from firmness in U.S. Treasuries after the annual gain in core U.S. consumer price index eased to 4.3% in July as expected from 4.5% in June in a sign inflation is peaking out.

The Bank of Japan’s buying in JGBs on Thursday also showed limited selling interest among brokers, especially in the five to ten year tenor, helping to support the market.

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