JGBs edge lower as Tokyo stocks bounce, BOJ in focus

Mon Feb 17, 2014 9:36pm EST

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TOKYO, Feb 18 (IFR) - Japanese government bond prices edged down on Tuesday as Tokyo stocks bounced, with activity subdued as the market took a wait-and-see stance ahead of the Bank of Japan's monetary policy decision later in the day.

The yield on benchmark 10-year notes rose half a basis point to 0.605 percent, but was still within distance of its lowest levels since mid-November.

Lead March JGB futures finished midday down 0.02 point at 144.88.

The BOJ is expected to keep monetary policy steady on Tuesday and maintain its upbeat view on the economy.

However, data on Monday showed the world's third-largest economy grew much slower than expected in the fourth quarter, underscoring the challenge of ending nearly two decades of stagnation.

In the wake of the soft data, the market will focus on whether BOJ Governor Haruhiko Kuroda will stick to his view of last month that no further easing was needed now with prices rising steadily and overseas economies recovering.

Traders said the super long zone sagged as participants tried to make room to accommodate the new 20-year debt that the Ministry of Finance will offer in an auction on Wednesday.

The 20-year yield rose 0.5 basis point to 1.455 percent.

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