TOKYO, May 12 (IFR) - Japanese government bonds weakened
slightly on Monday, pushing yields higher, with sentiment
pressured by supply concerns.
The superlong zone weakened due to speculation that the Bank
of Japan might reduce its bond purchases there under its massive
asset-purchase programme, market sources said. Such concerns
were heightened by a report in a domestic fax service.
As there are duration-heavy auctions this month, successful
bidders are seen as likely selling the new issues to the Bank of
Japan, so that the central bank could reduce its superlong
purchases if the average remaining maturity of its JGB purchases
exceeds 7 years.
The yield on the 20-year JGB rose the most,
adding 2 basis points to 1.485 percent. The 30-year yield
rose 1 basis point to 1.710 percent, while the
10-year yield also added 1 basis point to 0.610
percent. The 5-year yield rose by 0.5 basis point.
Ten-year lead June JGB futures moved in an
extremely narrow 145.03-145.10 range before finishing at midday
down 0.06 point at 145.07.
The JGB market had a muted reaction to data released on
Monday that showed a much lower-than-expected current account
surplus in March on weak demand for exports and rising imports.
(Reporting by Takahiro Okamoto; Editing by Jacqueline Wong)