JGBs firm; 30-year sale, primary dealers' meeting in focus
TOKYO, Jan 10 (Reuters) - Japanese government bond prices gained on Thursday, as the market focused on a 30-year sale that was expected to meet solid demand at current yield levels. * The Ministry of Finance is offering 700 billion yen of 30-year bonds, reopening of the No.37 issue which carries a 1.9 percent coupon. * "The superlong zone was oversold in recent weeks, so we're expecting decent demand at these levels, particularly since there were some bargain hunting yesterday," said a fixed-income fund manager at a Japanese asset management firm in Tokyo. "But sometimes when the bonds rise even ahead of a sale, there is some adjustment selling in the afternoon," he cautioned. * Yields on 30-year bonds fell 1.5 basis points to 1.990 percent, after they rose above 2 percent on Tuesday for the first time since December 2011. Yields on 20-year bonds also slipped 1.5 basis points to 1.775 percent. * Expectations of more easing this month from the Bank of Japan have also bolstered bond market sentiment. The BOJ will consider easing monetary policy again at its Jan. 21-22 meeting, likely by increasing its 101 trillion yen ($1.2 trillion) asset buying and lending programme, according to sources. * The 10-year JGB yield crept down half a basis point to 0.815 percent, moving away from a 4-1/2-month high of 0.840 percent hit on Monday. * The benchmark 10-year JGB futures contract ended morning trade up 0.04 point at 143.47. * Later on Thursday, the Ministry of Finance is scheduled to hold regular meetings with JGB investors and primary dealers, to discuss how it will allocate this year's additional issuance of JGBs. The government will sell around 6 trillion yen more in government bonds than it originally planned for fiscal 2012/13, a government source told Reuters on Wednesday, as the government prepares an extra budget with economic stimulus spending. The government is set to approve next Tuesday a 13.1 trillion yen extra budget. Around 10 trillion yen will be spent on public works and incentives to spur corporate investment.
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