May 7, 2019 / 4:41 AM / 2 months ago

JGBs gain as renewed trade worries stoke demand for safe-haven debt

TOKYO, May 7 (Reuters) - Japanese government bond prices gained across the board on Tuesday as U.S. President Donald Trump's threat to raise tariffs on Chinese goods this week rekindled fears of a trade war, stoking demand for safe-haven debt.

Japan's Nikkei dropped 1.5 percent as investors returned from a 10-day holiday and faced concerns that the U.S.-China trade negotiations may be derailed.

The five-year and 10-year JGB yields each declined by a basis point to minus 0.180 percent and minus 0.060 percent, respectively.

The 30-year yield dropped 2 basis points to 0.540 percent .

The JGB market took in stride the Bank of Japan's decision to trim the amount of JGBs with 10 to 25 years of maturity it plans to buy at its regular JGB-purchasing operations in May.

The central bank announced at the end of last month that it will buy 100 billion yen to 250 billion yen ($903 million to $2.26 billion) of 10- to 25-year maturity JGBs at each operation this month, compared with the 150 billion-250 billion yen range it had set for April.

The BOJ's balance sheet has ballooned with JGBs due to extensive monetary easing, and it has been gradually trimming the amount of debt it buys at market operations.

$1 = 110.6500 yen Reporting by the Tokyo markets team, Editing by Sherry Jacob-Phillips

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