* 10-yr futures slip, end below 20-day moving average
* BOJ minutes hint at possibility of further easing steps
By Lisa Twaronite
TOKYO, Nov 2 Japanese government bonds were
mostly steady in cash trading on Friday as investors awaited
U.S. employment data later in the session, while 10-year futures
slipped as equities rallied.
The benchmark 10-year yield was flat at 0.775
percent, after earlier inching up to 0.780 percent, and not far
from last Friday's close of 0.765 percent. On Thursday, it rose
as high as 0.785 percent, its highest level since Oct. 23.
October U.S. payrolls numbers on Friday are expected to show
a rise of 125,000, with the unemployment rate ticking up to 7.9
percent from the previous month's 7.8 percent, according to
economists polled by Reuters.
Payrolls processor ADP reported on Thursday that U.S.
companies added jobs in October at the fastest pace in eight
months while new claims for jobless benefits fell last week.
Investors also awaited the outcome of next Tuesday's U.S.
presidential vote, which could move U.S. Treasuries prices and
have an impact on JGBs.
"It's very hard to trade this market right now," said Shogo
Fujita, chief Japan bond strategist at Bank of America Merrill
Lynch, adding that some hedge funds have to convert positions to
cash ahead of year-end book closings at the end of this month.
"Going into December, I can't see anyone taking massive
positions or bets."
Ten-year JGB futures ended down 0.08 point at
144.06, finishing the week far below a nearly 3-month high of
144.47 touched on Tuesday and also below their 20-day moving
average, now at 144.15.
The Nikkei gained 1.2 percent, ending above the
9,000 mark for the first time in a week.
On the plus side for bonds, minutes of the Bank of Japan's
Oct. 4-5 policy meeting released on Friday suggested the central
bank will take further stimulus steps.
A few BOJ board members warned that a recession in the
world's third-largest economy could not be ruled out given
recent weakness in industrial production.
Yields on 20-year debt edged down half a
basis point to 1.675 percent, matching last Friday's close. The
30-year bond was flat, its yield at 1.940
"I guess there is still demand for the superlong sector from
Japanese life insurers, but they appear to be holding out for
better yield levels," said a fixed-income fund manager at a
Japanese asset management firm.
Longer maturities have faced pressure in recent weeks on
concerns about possible issuance disruption if a
deficit-financing bill needed to fund this fiscal year's budget
fails to pass this month. But those concerns faded this week as
the government appeared to move closer to its passage.
Japan's government is ready to compromise with the
opposition to pass the bill, Vice Finance Minister Tsutomu Okubo
told Reuters in an interview on Thursday.
Shinzo Abe, president of the main opposition party Liberal
Democratic Party, said it is also ready to accept talks on the
bill, Japanese media said.