TOKYO, June 24 Yields on benchmark 10-year
Japanese government bonds edged higher on Monday, tracking sharp
selloff in U.S. Treasuries after Federal Reserve Chairman Ben
Bernanke's statement the U.S. central bank plans to scale back
its stimulus later this year.
* The Bank of Japan's offer to buy 650 billion yen ($6.7
billion) worth of bonds as part of its monetary easing
operations to revive the world's third-largest economy helped
support JGBs, however.
* The 10-year yield was up 1 basis point at
0.885 percent after trading as low as 0.870 percent and as high
as 0.890 percent.
* On Friday, benchmark 10-year U.S. Treasury yields
rose to their highest in more than 22 months,
marking a miserable week for the bond market as investors fled
in the wake of the news from the Fed that it might pare its bond
purchases later this year.
The 10-year U.S. Treasury yield rose 41.3 basis points last
week, posting the biggest weekly jump since November 2001.
* "The BOJ announcement of its operations is one of the
factors," said Yuya Yamashita, rates strategist at JPMorgan in
* Ten-year JGB futures fell 0.12 point to 141.98
after trading as high as 142.24.
* On April 4, the Japanese central bank unveiled the world's
most intense burst of monetary stimulus, promising to inject
$1.4 trillion into the economy in less than two years to meet
its pledge of achieving 2 percent inflation.
* Expectations of month-end buying Japanese pension funds
and quarter-end buying by life insurers also supported longer
maturities, Yamashita said, adding that investors were also
likely to reinvest a large bond redemption this month.
* The 20-year yield eased 0.5 basis point to
1.750 percent, while the five-year yield was
unchanged at 0.355 percent.
* "Although 5s have richened slightly versus 10s since May,
the basic correlation remains intact, suggesting the low, stable
level of short- to medium-term yields will likely continue to
contain any rise in 10-year yields to some extent," Barclays
Securities wrote in a note.
"If so, JGB long-term yields could be less likely to follow
any issue in U.S. yields."