JGBs soar on strong auction results (Reuters) (20-01-2011)

TOKYO - Japanese government bond prices soared on Thursday after strong results at a 20- year JGBs auction

The 1.1 trillion yen ($13.4 billion) auction of reopened 20-year bonds drew bids 4.46 times the offer, the highest ratio since the September tender and above an average ratio of 3.69 from the past 12 sales.

The auction's tail, the difference between the lowest and average accepted price, tightened to 0.02 -- the smallest since May -- from 0.12 last month,

The strong auction results forced many primary dealers who had formed short positions in preparation for the auction to cover these positions while the solid results helped March 10-year JGB futures gain 0.48 point to 139.73 just shy of the tenkan line on the ichimoku chart at 139.77.

In the cash bond market, the yield on the 20-year JGB fell 8.5 basis points to 1.980 percent the biggest single-day fall in more than four months. The 30-year bond yield fell 7.0 basis points to 2.155 percent.

The 10-year bond yield fell 6.0 basis points to 1.200 percent from a one-month high of 1.260 percent marked on Wednesday.

Source: Reuters