TOKYO, Sept 18 Japanese government bonds fell
across the curve on Tuesday, on growing scepticism the Bank of
Japan will follow the U.S. Federal Reserve in taking stimulus
* At its two-day policy meeting ending on Wednesday,
strategists are mixed on whether the BOJ will muster new
stimulus steps, though most expect the central bank to keep
easing hopes alive by presenting a dimmer view of Japan's
economy. Some say the BOJ could decide to act to stem any rise
in the yen, which briefly strengthened after the Fed's
aggressive easing move last week.
* The Fed said on Thursday that it would purchase $40
billion of mortgage-backed debt per month until it sees
improvement in the employment situation. It also decided to
extend its time frame for maintaining its current low interest
rates until at least mid-2015, from its previous plan through
* The JGB sell-off was limited by caution ahead of the BOJ
meeting, as well as by expectations of dip-buying ahead of large
quarterly JGB redemptions on Thursday. Japanese markets were
closed for a public holiday on Monday.
* "The yen has weakened from highs hit last week, and
Japanese stocks appear to be holding up despite concerns about
the ongoing unrest in China, so there would appear to be less
compelling reasons for the BOJ to take steps at this meeting,"
said a fixed-income fund manager at a Japanese trust bank.
* Japanese shares were mostly steady as support from the
weaker yen offset fears about the impact of anti-Japan protests
in China, as tensions rose over a territorial dispute.
* The 10-year JGB futures contract for December
ended morning trade down 0.22 point at 143.65 after falling as
low as 143.48, matching a low hit last Thursday which was its
lowest level since Aug. 21.
* The yield on the benchmark 10-year cash bond
rose 2 basis points to 0.815 percent after rising
as high as 0.825 percent, moving back toward a three-week
intraday high of 0.835 percent hit on Thursday.
* The yield curve steepened as the superlong sector lagged,
with the 20-year bond yield adding 2.5 basis
points to 1.680 percent and the 30-year yield
also rising 2.5 basis points to a five-month high of 1.925