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JGB yields edge higher after robust U.S. job growth
TOKYO, March 11 |
TOKYO, March 11 (Reuters) - Yields on Japanese government bonds inched higher on Monday after data showed a sharp increase in U.S. job growth in February, signalling that the U.S. economic recovery was gathering pace.
* Strong expectations that the Bank of Japan under new leadership will adopt more forceful monetary easing to drag the economy out of doldrums from next month helped limit the rise in yields. But analysts said the uncertainty on whether the central bank will buy more longer-dated debt would keep trading in long-end of the yield curve volatile.
* Haruhiko Kuroda, the government's nominee to head the central bank, said on Monday that the BOJ had not been buying enough assets to meet its 2 percent inflation target and that if appointed he would do whatever it takes to achieve the goal.
* The 10-year yield rose 1 basis point to 0.660 percent after shedding 2.5 basis points on Friday after a decent sale of 30-year bonds implied solid demand for superlong maturities and prompted a wave of shortcoverings.
* Ten-year JGB futures lost 9 ticks to 144.94 after hitting a record high of 145.50 in the previous session.
* "The next BOJ meeting under Mr Kuroda will ease monetary policy which probably should be an aggressive one. The central bank is likely to extend purchase of JGBs to five years from the current three years," said Akito Fukunaga, chief rates strategist at Royal Bank of Scotland in Tokyo.
"The JGB yield decline trend will continue," he added.
* The 20-year yield put on 3.5 basis points to 1.630 percent, pulling away from a near 10-year low of 1.450 percent hit last Tuesday and after moving in a wide trading range of 8 basis points on Friday.
* "The over 10-year sectors, which have been very volatile for the past one to two weeks, will depend on whether the BOJ will buy from April. It's uncertain, so trading in the over 10-year sectors will be very volatile," Fukunaga said.
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