JGB futures jump as Nikkei slumps amid credit fears

By Satomi Noguchi

TOKYO, April 14 (Reuters) - Japanese government bond futures jumped more than half a point on Monday as Tokyo shares fell sharply, prompting investors to shift money back into safer debt.

Gains in futures were helped by a rise in U.S. Treasuries late last week after a sharp deterioration in consumer confidence and disappointing earnings news from General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz) that revived fears of a deep and prolonged U.S. recession.

Analysts said the meeting of Group of Seven finance leaders at the weekend gave the market little hope that the credit crisis was nearing an end, despite announcing a new plan to clean up banks and fresh resolve to rein in foreign exchange markets. [ID:nN13308317]

"The result (of the G7 meeting) was unsatisfactory to wipe out worries about credit risks," said Jun Ishii, chief fixed income strategist at Mitsubishi UFJ Securities in a note to clients.

June 10-year futures climbed 0.64 point to 139.95 2JGBv1 after jumping as high as 140.01.

Futures made up for all of their sharp losses just before the G7 meeting on the weekend and extended their gains as the Nikkei share average tumbled 2.9 percent .N225.

The benchmark 10-year yield fell 3.5 basis points to 1.340 percent <JP10YTN=JBTC> after dropping as low as 1.330 percent.

The five-year yield fell 3.5 basis points to 0.815 percent <JP5YTN=JBTC>, while the 20-year yield dropped 2 basis points to 2.090 percent <JP20YTN=JBTC>.