JGBs steady, underpinned by stronger U.S. Treasuries

Wed Jul 17, 2013 10:56pm EDT

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TOKYO, July 18 (Reuters) - Japanese government bond prices
were steady on Thursday, taking their cues from stronger U.S.
debt prices.
    
    * JGB prices were underpinned by stronger U.S. Treasuries,
whose yields hit their lowest levels in two weeks on Wednesday
after Federal Reserve Chairman Ben Bernanke said there was no
committed timetable for the U.S. central bank to scale back its
bond purchase program. 
    
    * In its regular operations under its stimulus program, the
Bank of Japan offered to buy a total of 700 billion yen ($7.02
billion) of bonds outright, consisting of 200 billion yen with
durations of one to three years to maturity, 300 billion yen
with three to five years, and another 200 billion yen with 10
years and longer.
    
    * The benchmark 10-year yield edged up half a
basis point to 0.820 percent after earlier falling to 0.810
percent. It remained in the 0.80 percent and 0.90 percent range
where it has traded since late May.
    
    * "There's an election this weekend, so some market
participants might be waiting for that to be over, before they
take new positions," said a fixed-income fund manager at a
European asset management firm in Tokyo.
    "But the election itself is unlikely to present any event
risk, so I doubt the market will move much even after it," he
added. 
    
    * Japan's upper house election on Sunday is expected to
deliver a victory for the ruling party of Prime Minister Shinzo
Abe, giving him more support to pursue his aggressively
reflationary policies.  
    
    * The 10-year JGB futures contract ended morning
trade nearly flat, up 0.01 point at 143.23 after earlier rising
as high as 143.37. 
    
    * The five-year yield was also flat at 0.290
percent after falling to a fresh five-week low of 0.285 percent,
bolstered by solid demand at the previous session's auction of
that maturity.
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