TOKYO, July 4 Benchmark Japanese government bond
prices edged up on Thursday, though gains were limited by
caution on supply concerns as the finance ministry conducted an
auction 30-year debt.
* The Ministry of Finance offered 600 billion yen ($6.02
billion) of 30-year bonds with a coupon of 1.9 percent,
reopening the current issue.
* As July is the beginning of a new quarter, many investors
probably feel little pressure to hurry their purchases,
strategists at Bank of America Merrill Lynch said in a note to
"Although the 30-year JGB is a BUY in terms of price, some
investors intend to stay on the sidelines for the auction and
purchase in the secondary market, so we expect satisfactory
results backed by cost-averaging demand," they wrote.
* The 10-year yield shed half a basis point
to 0.875 percent, still mired in a 0.80 to 0.90 percent trading
range where it has been stuck the past five weeks.
* Ten-year JGB futures ended morning trade up 0.08
point at 142.43 after trading in a narrow range between 142.37
* The superlong tenor slipped ahead of the 30-year sale, as
investors made room in their portfolios to buy. The 30-year
yield inched up half a basis point to 1.905
percent, matching a six-week high touched in the previous
The 20-year yield added 1 basis point to
* Bank of Japan Governor Haruhiko Kuroda told a quarterly
meeting of the BOJ's regional branch managers that the economy
is on track to a steady recovery with signs inflation
expectations are picking up.
* Rising Treasury yields and expectations of continued BOJ
easing at home could eventually prompt Japanese investors to
seek higher returns in overseas assets, but such a trend is not
yet in place.
Japanese Ministry of Finance data showed Japanese investors'
net selling of foreign bonds continued last week, for the
seventh straight week.
* "We're paying cautious attention to developments in
Europe, and awaiting the U.S. payrolls report, but for now,
domestic supply conditions are the main factors in the JGB
market," said a fixed-income fund manager at a European asset
* The European Central Bank will hold its monthly meeting
on Thursday, against a backdrop of a political crisis in
Portugal which risks derailing that country's efforts to emerge
from its international bailout.
* U.S. financial markets will be closed on Thursday in
observance of the Independence Day holiday. On Friday, the key
jobs report for June is expected to show payroll additions of
165,000 last month and a lower unemployment rate of 7.5 percent,
according to economists polled by Reuters.