TOKYO Nov 22 Japanese government bonds slipped
on Thursday, as growing expectations of aggressive stimulus by a
possible new government after next month's election continued to
pressure the yen and push up equities, weighing on bonds.
* The 10-year JGB futures contract ended morning
trade down 0.01 point at 144.55, on track for its fourth session
of losses, and moving away from a nine-year high of 144.73 hit
* In cash trading, yields on 10-year notes
rose 1 basis point to 0.740 percent.
* "The forex markets and stock markets are reacting to the
Japanese political situation, but the reaction in the bond
market has been understated by comparison, with many investors
sidelined until next month's election," said a fixed-income fund
manager at Japanese asset management firm.
* The ruling party is expected to lose support to the main
opposition Liberal Democratic Party at the Dec. 16 election. On
Wednesday, the LDP revealed a platform calling for a big extra
budget and a policy accord with the Bank of Japan for aggressive
* The BOJ held off on any additional monetary steps at its
latest policy meeting on Tuesday, as expected.
* The yen fell to a 7-1/2-month low versus the
dollar on Thursday, lifting the Nikkei share average to
a six-month high.
* Open interest on the benchmark JGB futures contract this
week has risen to its highest levels since early June, which
suggests market participants are building up positions ahead of
* Yields on 20-year debt rose 1 basis point
to 1.685 percent, while 30-year bonds were untraded after their
yield settled at 1.945 percent on Wednesday.
* Japanese markets will be closed for a holiday on Friday.