TOKYO, April 22 Japanese government bonds
slipped slightly on Monday, taking their cue from a weaker yen
and stronger equities markets, but moves were small as market
participants awaited a Bank of Japan meeting later in the week.
* The BOJ will update its forecasts at its April 26 policy
meeting. Investors will be watching whether BOJ Governor
Haruhiko Kuroda's two-year time frame to attain its 2 percent
inflation target becomes an official forecast.
* "Stocks are up, the yen is down and bonds are quiet
today," said a fixed-income fund manager at a Japanese trust
"If the BOJ's easing steps work, we will eventually have to
start pricing in inflation at the longer end, but for now, ahead
of Golden Week, big market moves aren't likely," he added.
* The yield on benchmark 10-year bonds added
half a basis point to 0.585 percent. It moved further away from
its record low of 0.315 percent struck on April 5, the day after
the BOJ shocked markets with its pledge to double its bond
holdings in two years to help it meet the goal of 2 percent
* Japan's central bank governor and finance minister
reiterated on Monday that the Group of 20 countries accepted
that Japan's monetary easing is not aimed at weakening the yen.
That helped the yen start the new week near a
four-year low versus the dollar, not far from the 100-yen level
that it has not crossed since April 2009. The weaker yen in turn
helped push the Nikkei share average close to a
* The 10-year futures contract ended morning
trading down 0.02 point at 144.56, after moving in a narrow
range between 144.51 and 144.64.
* The 20-year yield added half a basis point
to 1.435 percent, while the 30-year bond was so far untraded,
its yield having closed on Friday at 1.545
* In addition to the BOJ, market participants also awaited
investment plans for this fiscal year through March 2014 from
several major Japanese life insurers.
Domestic life insurers hold $3.4 trillion in assets, and the
BOJ's aggressive stimulus is likely to lead them to shift some
of their money into foreign bonds. But the head of Japan's life
insurance industry group said on Friday that such a shift would
likely be temporary, with JGB yields likely to move up in the
medium term as a result of the BOJ's measures. [ID:nL3N0D6G6G
* Strategists at Barclays Japan advise closing the
10-year/20-year flattener they had previously recommended.
"The stability at the short end, albeit fragile, may well
slow the belly (10-year) cheapening that has been our theme
since the April MPM (BOJ monetary policy meeting)," they said in
a note to clients on Monday.