JGB drop in line with U.S. Treasuries on stimulus hopes

TOKYO, Oct 21 (Reuters) - Japanese government bonds (JGBs) dipped on Wednesday, tracking an overnight rise in U.S. Treasury yields, as hopes that the United States was nearing a deal on coronavirus relief dampened the safe-haven appeal of debt.

Benchmark 10-year JGB futures fell 0.23 point to 151.9, marking a near two-week low, with a trading volume of 26,288 lots.

The 10-year JGB yield rose 1 basis point to 0.030%, its highest level since Oct. 9.

In the super-long zone, the 20-year JGB yield rose 1 basis point to 0.405%.

Meanwhile, the 30-year JGB yield and the 40-year JGB yield climbed 2 basis points each to 0.625% and 0.650%, respectively.

At the shorter end of the curve, the two-year JGB yield edged up half a basis point to minus 0.140%, while the five-year yield gained 1 basis point to minus 0.105%.

With just two weeks until the U.S. presidential election, lawmakers moved closer to an agreement on a new coronavirus relief package as President Donald Trump said he was willing to accept a large aid bill.

The Bank of Japan maintained the size of its bond purchase in its operation on Wednesday, buying one- to three-year JGBs and five- to ten-year notes worth 420 billion yen each, and 350 billion yen of three- to five-year bonds. (Reporting by Tokyo Markets Team; editing by Uttaresh.V)

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