TOKYO Nov 5 Benchmark Japanese government bonds
inched up on Monday ahead of the U.S. presidential election on
Tuesday and a vote in the Greek parliament over a new austerity
package later in the week.
* The 10-year yield dipped 0.5 basis point to
0.770 percent, while 10-year JGB futures rose 8 ticks
to 144.14, breaking above t h eir 14-day moving average at 144.12.
* "If (Barack) Obama wins (the U.S. election), then the risk
market would be modestly sold off. U.S. Treasury yields, and
accordingly JGB yields, may face bullish pressure," said Yuya
Yamashita, rates strategist at J.P. Morgan.
"If (Republican candidate Mitt) Romney wins, the risk market
would show a good performance. Our U.S. strategist expects under
the Romney victory scenario, 10-year U.S. Treasuries would rise
to 2 percent. Then JGBs would come under bearish pressure."
* Greece's government will present a new austerity package
to parliament on Monday. Prime Minister Antonis Samaras' package
of 13.5 billion euros ($17.3 billion) in cost cuts and tax hikes
is expected to be voted on Wednesday along with measures making
it easier for firms to hire and fire workers.
* Yields on both 20-year and 30-year debt
edged 0.5 basis point higher, to 1.685 and 1.945
* Barclays said the benchmark 10-year yield was unlikely to
rise above 0.80 percent due to the weak global economic outlook,
even though U.S. jobs data for October came in better than
* "Although U.S. employment data beat expectations, U.S.
yields ended largely flat on the day. The global economic cycle
likely bottomed around September, but in the absence of
demand-driving sectors, the pace of recovery is likely to be
modest," Barclays said in a note.
"The duration of monetary accommodation in major economies
has yet to be influenced substantially by fundamentals. Indeed,
if the U.S. presidential election give rise to negative views in
risk asset markets linked to the U.S. fiscal cliff and financial
regulation, long-term yields could even come under downward