JGB futures fall as Nikkei climbs but losses limited

By Satomi Noguchi

TOKYO, April 16 (Reuters) - Japanese government bond futures fell on Wednesday as Tokyo shares climbed and trimmed the safe-haven appeal of debt after better-than-expected quarterly results at U.S. firms provided some relief to investors worried about the slowing economy.

But losses in JGBs were limited as investors stayed largely on the sidelines due to caution about credit market conditions before earnings reports from major U.S. investment banks later in the day, analysts said.

"It's tough timing for creating bets on either" direction in the market, said Katsutoshi Inadome, a fixed-income strategist at Mitsubishi UFJ Securities.

"Depending on the earnings results, a view could be reinforced that the risk reduction movements in the market had peaked in March. Or, bad earnings results could lift JGB futures up again," Inadome said.

June 10-year futures were down 0.20 point at 139.43 2JGBv1.

They dropped to the day's low of 139.33, near a one-month low of 139.13 struck last week, as the Nikkei share average .N225 climbed 1.4 percent, boosted by high-tech exporters after Intel Corp (INTC.O: Quote, Profile, Research, Stock Buzz) affirmed its profit-margin target for 2008.

JPMorgan Chase (JPM.N: Quote, Profile, Research, Stock Buzz), the third-largest U.S. bank, and Wells Fargo (WFC.N: Quote, Profile, Research, Stock Buzz), the No. 5 U.S. bank, are to report their earnings on Wednesday. [RESF/US]

The benchmark 10-year yield was flat at 1.345 percent <JP10YTN=JBTC> and stayed in a range near a one-month high of 1.380 percent first hit earlier this month.