TOKYO Aug 14 Japanese government bond prices
were mostly weaker on Tuesday, although the 20-year yield was
flat suggesting investors saw value in that part of the yield
curve, analysts said.
The JGB market also shrugged off minutes of the Bank of
Japan's July meeting, which showed a few BOJ board members said
the central bank should not rule out any options in advance and
stand ready to act if substantial risks emerge as a result of
Europe's debt woes.
"I don't think this is having an impact on the market today.
It's more of the quiet, low volatility, low volume market," said
Maki Shimizu, senior strategist at Citigroup Global Markets
"Ten-year and 30-year sectors are slightly weaker and the
20-year sector is flat, probably reflecting some sentiment in
the market that the 20-year sector will be the one to keep the
Yields on both 10- and 30-year bonds
inched up 0.5 basis points, to 0.790 and 1.830
percent, respectively, while the 20-year yield
was flat at 1.615 percent.
"The 20-year sector looks relatively cheap versus the
long-term sector," Shimizu said. "The level itself for the
10-year sector is still below 0.80 percent."
"It hardly goes beyond that level, meaning dip buying
pressure is around 0.80 percent. That inversely shows that
investors do not prefer low levels below 0.80 percent. It's more
of an extension need to seeking higher yield. It makes sense to
have the 20-year tenor rather than the 10-year for now at the
Ten-year JGB futures slipped 3 ticks to 143.96 but
held above their five-day moving average at 143.92.
As many investors were away for Japan's summer "Obon"
holidays, trading volume in 10-year futures remained light, with
14,477 contracts changing hands, up from a one-month low of
12,361 contracts on Monday but down from last week's average of
Barclays Securities recommended buy at-the-money call
options on JGB futures at 144, saying yields were higher
compared to the end of the previous quarter and that there was
an incentive to at least hold the current level, even though
investors tend to take profit as Japan's first-half fiscal year