TOKYO May 13 Japanese government bond prices
tumbled on Monday, with the 10-year yield hitting a three-month
high, as falls in the yen boosted Japanese share prices while
talk that the U.S. Federal Reserve may consider cutting back its
buying programme hurt U.S. bonds.
* Investors were also cautious ahead of a 30-year bond
auction on Tuesday, though losses were curtailed by the Bank of
Japan's 1.2 trillion yen ($11.8 billion) bond buying announced
on Monday, a part of the central bank's 7.5 trillion yen monthly
buying of JGBs.
* The 10-year cash bond yield rose 5.5 basis point to 0.750
percent after having posted its biggest rise in
five years on Friday.
* The benchmark 10-year bond futures fell 0.53
point in price to 143.17. At one stage, they fell as low as
142.98, the lowest level for the benchmark contract in almost a
* JGBs eased as their safe-haven attraction is eroded by
rise in Japanese shares to 5 1/2-year highs on falls in the yen.
* Ten-year U.S. bond yields also rose to seven-week high as
recent strength in U.S. jobs data fanned speculation the Fed
could pare its bond buying later this year.
* "Thanks to the BOJ's buying today, the market has stopped
falling for now. It appears the BOJ wants to stop bond yields
rising further from current levels around 0.75 percent," said
Katsutoshi Inadome, strategist at Mitsubishi UFJ Morgan Stanley
* "Nonetheless, JGBs could fall further if U.S. Treasuries
decline. Investors are starting to question the idea that JGB
yields should fall because the BOJ is buying bonds," he added.
* Part of the market's weakness is stemming from caution
ahead of Tuesday's 500 billion yen ($4.91 billion) 30-year bond
*The 30-year bond yield rose to a high of 1.760 percent
, its highest in two-months, at one point. It last
stood at 1.745 percent, up 3.5 basis point on the day.