JGBs slip slightly as stocks firm; 5-year sale in focus
TOKYO Oct 16 (Reuters) - Japanese government bonds slipped slightly on Tuesday as investors took their cues from stronger Japanese equities and weaker U.S. Treasuries, while a sale of 5-year notes was expected to meet firm demand.
* The Ministry of Finance offered 2.5 trillion yen of newly issued 5-year bonds, with a coupon set at 0.2 percent, matching those of the past five sales.
* The 5-year sale is expected to proceed smoothly as the central bank's monetary policy has pinned yields at the shorter end, market participants said.
* "It's a matter of small degree. The 5-year sale will probably either be smooth or strong, with the words, open to individual interpretation, but the point is that no one expects it to be weak," said a fixed-income fund manager at a Japanese asset management firm.
"Considering that Japanese stocks are rallying today, bonds are not selling off so much," he added.
* Japan's Nikkei share average rose 0.9 percent as index heavyweight Softbank Corp rallied after the company confirmed a $20 billion acquisition of a U.S. competitor with a loan from four banks that also benefited from the news.
* U.S. Treasury prices eased on Monday after data showed U.S. retail sales were stronger than expected in September.
* The 5-year JGB was untraded on Tuesday, with its yield having closed at 0.195 percent on Monday.
* The benchmark 10-year yield rose half a basis point to 0.755 percent.
* The 10-year JGB futures contract ended morning trade down 0.04 point at 144.28, moving away from a nine-week high of 144.34 hit on Friday.
* On Thursday, the Ministry of Finance will offer 1.2 trillion yen of 20-year JGBs.
* The 20-year bond was untraded on Tuesday, with its yield closing at 1.650 percent in the previous session. The yields on 30-year debt was flat at 1.915 percent.
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