TOKYO, Dec 9 (IFR) - Japanese government bond prices ended
the morning mixed on Monday, with the superlong zone slightly
underperforming as the Bank of Japan refrained making any
purchases this session under its asset-buying stimulus program.
The 7-year to 10-year zone outperformed the rest of the
curve, as several regional banks bought 10-year JGBs on dips,
sending the yield on the current 10-year JGBs down half a basis
point to 0.665 percent.
Last Friday, one large savings bank purchased the current
10-year JGBs on dips. The 7-year to 10-year JGBs turned firmer
on Monday even though the BOJ did not offer to buy
coupon-bearing JGBs, contrary to market expectations.
One corporate pension fund manager told IFR this morning
that he does not expect the majority of other corporate pension
funds at large Japanese trust banks to start shortening the
duration of their bond portfolios soon, because of concerns
about Japan's economic outlook.
Data released on Monday showed Japan's economy expanded less
than expected in July-September, suggesting that the recovery
remains fragile due to soft global demand.
At midday, the yield on the current 5-year JGBs
was unchanged from Friday at 0.20 percent, ahead
of Thursday's monthly sale of 2.7 trillion yen ($26.29 billion)
of 5-year notes.
In the super-long zone, the 20-year yield
rose 0.5 basis point to 1.515 percent, while the 30-year yield
also added 0.5 basis point to 1.685 percent ahead
of Tuesday's monthly auction of 600 billion yen of 30-year
Lead December JGB futures moved in a 144.39-144.69 range
before finishing the morning session up 0.16 point at 144.67
ahead of Wednesday's contract expiry.