July 9, 2019 / 5:40 AM / a year ago

JGB prices drop on dampened Fed rate-cut bets, weak 5-year auction

TOKYO, July 9 (Reuters) - Japanese bond prices dropped for a second session on Tuesday as investors continued to unwind bets that the U.S. Federal Reserve will aggressively cut interest rates by 50 basis points this month.

Bond prices also weakened after an auction of 5-year government debt drew less bids than the previous auction, raising concerns about investor demand.

Ten-year JGB futures fell -0.02 point to 153.75, with a trading volume of 15722 lots, while yields on 10-year cash bonds rose 0.5 basis point to -0.150%.

The 20-year JGB yield dipped 0.5 basis point to 0.205%.

The 30-year JGB yield dropped 1.5 basis points to 0.335%.

The five-year JGB yield rose 1 basis point to -0.230%.

At the short end of the curve, two-year JGB yield was flat at -0.205%.

Investors will closely analyse Fed Chairman Jerome Powell's comments when he delivers his semi-annual monetary report before Congress on Wednesday and Thursday to gauge how far the U.S. central bank will lower interest rates. (Reporting by the Tokyo Markets Team, Editing by Sherry Jacob-Phillips)

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