TOKYO Jan 7 Japanese government debt prices
were largely steady on Tuesday, ahead of an auction of 2.4
trillion yen ($23 billion) of 10-year bonds later in the day.
The 10-year yield was unchanged at 0.725
percent, though it was not far from a four-month high of 0.740
percent set on Friday.
The finance ministry is to sell the 10-year bonds on Tuesday
with a coupon rate of 0.6 percent.
"The 10-year yield may look more attractive from a
short-term perspective given that it has risen to around 0.75
percent for the first time since September," analysts at Morgan
Stanley MUFG said in a note. "Moreover, the 10-year sector has
also cheapened on the curve of late.
"However, cushion levels still do not afford sufficient
protection against the risk of interest rates moving
significantly higher," they said, adding that they "recommend
against aggressive outright longs at this juncture."
Ten-year JGB futures added 4 ticks to 143.58,
breaking above the five-day moving average of 143.55.
Both the 20- and 30-year yields
were up 0.5 basis point, at 1.570 and 1.725