Hot sectors in a tepid recovery
The energy, finance, technology and healthcare industries are expected to be the hottest areas for dealmaking in 2010. Full Article | Full Coverage
JGB futures hit 11-mth low on Treasuries,await BOJ
By Shinichi Saoshiro
TOKYO, June 13 (Reuters) - Japanese government bond futures hit an 11-month low on Friday, sagging after losses in U.S. Treasuries overnight and amid jitters before a news conference by Bank of Japan Governor Masaaki Shirakawa.
The lead three-month euroyen futures contract sank to a 12-year low of 98.675 JEYv1 as market players waited to see whether Shirakawa would emphasise a need to quell inflation.
JGBs have been roiled in the past week due to surprisingly blunt inflation-fighting rhetoric from central bankers in Europe and the United States that has been seen as opening the way for a potential BOJ rate rise later this year.
"The JGB market is trying to price in the governor's press conference," said Chotaro Morita, chief fixed-income strategist at Barclays Capital in Tokyo.
"The morning decline implies that the market is preparing for the possibility of the BOJ being unable to fully distance itself from the anti-inflation rhetoric," Morita said.
The BOJ is widely expected to keep interest rates unchanged at 0.50 percent at a two-day policy meeting that ends on Friday.
But swap contracts on the overnight call rate show that investors now see a roughly 95 percent chance of the BOJ raising interest rates to 0.75 percent by year-end, up from a less than 50 percent probability seen earlier in the week.
The contracts also show a roughly 65 percent chance of two BOJ rate rises to 1.0 percent over the next year. JPONIBOJ=TRDT
Two-year JGB yields, the sector most sensitive to shifts in monetary policy, rose 2 basis points to 1.005 percent after briefly touching a fresh 10-month high of 1.025 percent JP2YTN=JBTC.
September 10-year JGB futures fell 0.71 point to 132.50, having briefly touched an 11-month low of 132.33 2JGBv1.
The benchmark 10-year JGB yield rose as much as 6 basis points to 1.855 percent, an 11-month high JP10YTN=JBTC.
Stronger-than-expected U.S. retail sales data released on Thursday appeared to increase chances for the Federal Reserve to hike rates this year, and the two-year Treasury note yield topped 3 percent, the highest level since early January.[US/]. (Editing by Chris Gallagher)
