TOKYO, Sept 24 Japanese government bonds firmed
on Monday, pushing benchmark yields to a three-week low, as
fears about slowing global growth returned to the fore, adding
to the appeal of safe haven fixed income assets.
* Japanese equities markets sagged in line with regional
counterparts, bolstering bonds, though most market participants
did not foresee significant moves in yields this week.
* This week marks the final trading week of both the month
as well as the quarter, so some market participants expected
funds to buy longer maturities to extend the duration of their
portfolios. That could support the longer end of the yield
Short-term rates, on the other hand, are anchored by the
Bank of Japan's easy monetary policy, with the central bank
buying JGBs with up to three years left to maturity under its
quantitative easing programme. Last week, the BOJ said it will
increase its asset buying and loan programme by 10 trillion yen
($127.94 billion) to 80 trillion yen, with the increase aimed at
government bonds and treasury discount bills.
* A two-year auction on Thursday is expected to proceed
smoothly, market participants said, as the central bank now buys
much of the supply of that maturity.
* "There might be some duration buying, but overall, this is
a week in which rates won't move much, with bonds supported by
global economic fears," said a fixed-income fund manager at a
Japanese trust bank in Tokyo.
* A weekly JGB market survey conducted by Thomson Reuters
found that most respondents did not expect big market moves,
with 64.3 percent expecting yields to move sideways, up from
43.6 percent in the previous survey.
* The 10-year JGB futures contract for December
ended morning trade up 0.18 point at 143.98.
* The yield on the benchmark 10-year cash bond
gave up 1 basis point to 0.790 percent, its
lowest level since Sept. 4, though still within this month's
narrow range between 0.775 percent and 0.835 percent.
* The 20-year bond yield slipped half a basis
point to 1.660 percent.
The 30-year note was untraded so far after
its yield rose to a more than five-month high of 1.950 percent