JGB futures rise on weak stocks,lingering credit woes

By Chikako Mogi

TOKYO, April 22 (Reuters) - Japanese government bond futures edged higher on Tuesday as lingering concerns about the health of global financial institutions and falling stocks fueled demand for the safety of government debt.

Concerns were renewed after Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz), the No. 2 U.S. bank, reported on Monday a fall in first-quarter profit due to write-downs and rising credit losses. [ID:nN21410537]

In addition, the Bank of England unveiled a plan on Monday to swap banks' risky mortgage assets for at least 50 billion pounds ($99 billion) of government debt. [ID:nL21163535]

"These developments show it is still too early to remove credit market concerns. It offers investors an opportunity to buy on dips," said Mari Iwashita, a senior market economist at Daiwa Securities SMBC.

June 10-year futures 2JGBv1 were up 0.11 point at 138.15, off a day high of 138.29 but above a seven-week low of 137.98 hit on Monday.

But investors remained cautious, avoiding making big bets on the direction of the market ahead of a key U.S. monetary policy decision and data later this month, analysts said.

"Not many investors have the strength to take huge risks by betting on direction, and their cautious stance keeps trade in range, especially before the Fed and the jobs data," Iwashita said.

The Federal Reserve is widely expected to lower interest rates further at its meeting next week while monthly jobs data, also due next week, will likely underscore the weakness in the U.S. economy.