TOKYO, March 28 Yields on benchmark 10-year
Japanese government bonds plumbed a near-decade low for a sixth
day in a row on Thursday, driven by market conviction that the
central bank will deliver a bold monetary stimulus at its
meeting next week.
The 10-year yield dipped 0.5 basis point to
0.510 percent, its lowest level since June 2003, when it vaulted
a record trough of 0.430 percent on the back of the Bank of
Japan's quantitative easing measures. It has fallen 28.5 basis
points so far this quarter, on track for its biggest three-month
fall since April-June 2010.
But Maki Shimizu, senior strategist at Citigroup in Tokyo,
recommended investors close their long positions on the 10-year
sector ahead of an auction of 2.4 trillion yen ($25.4
billion)worth of similar maturities on Tuesday and the BOJ
policy meeting on April 3 and 4.
"We just closed our 10-year long strategy. Many people among
domestic investors are probably thinking about closing their
long positions now, ahead of the BOJ meeting," she said.
"We are wary of the factors that could support higher yield
from next week onwards. We chose not to wait until the BOJ
Ten-year JGB futures marked a new record high of
145.98, before ending the morning session at 145.91, up 0.03
Shimizu said investors were also likely to take profit near
the start of the financial year in Japan, which begins on April
"The question is when that will happen ... whether they will
wait until the BOJ meeting. If that becomes the majority view
(waiting until the BOJ meeting) into next week, then the 10-year
yield can renew this 0.430 (percent) record low," she said. "The
view is still spilt."
The 20-year yield fell 2 basis points to
1.415 percent, just a tad above its near-decade low of 1.410
percent touched on Tuesday.
The 30-year yield underperformed, creeping up
0.5 basis point to 1.585 percent. Still, the yield on the
long-dated tenor has eased 39 basis points since the start of
The two-year yield inched up 0.5 basis point
to 0.040 percent ahead of an auction of 2.9 trillion yen worth
of similar maturities later on Thursday. The Ministry of Finance
offered the short-dated bonds with a coupon of 0.10 percent.