TOKYO Nov 28 Japanese government bond prices
ticked higher on Wednesday, with benchmark futures prices
hitting a 9-1/2-year high, helped by lack of progress in
negotiations to resolve the U.S. "fiscal cliff" budget crisis
and fall in Chinese shares.
* The benchmark 10-year JGB futures price rose 0.16
point to 144.78, briefly rising to 144.79, their highest level
since June 2003, when they had gone to as high as 145.09.
* The current 10-year cash JGB yield fell 1.0 basis point to
0.720 percent, matching its nine-year low hit in
July. That level has been a strong support for the yield in the
past half year.
* JGBs benefited from worries over the U.S. "fiscal cliff"
as U.S. lawmakers remained deadlocked over how to ease the
likely shock from $600 billion of fiscal tightening due to kick
in early next year.
* The fall in Shanghai shares to a near four-year
low was also a talking point among some market players, who are
still not convinced of a strong recovery in the Chinese economy.
* "Although recent Chinese economic data is showing signs of
improvement, Shanghai share prices seem to suggest that it is
still far from a full-fledged recovery," said Takeo Okuhara,
fund manager at Daiwa SB Investments.
* "Given dimming hopes of a strong recovery in the U.S.,
China and Japan, bonds are likely to gain further. I expect the
10-year yield to dip below 0.7 percent by December," Okuhara
* The 20-year bond yield fell 0.5 basis point to 1.660
percent. The spread over the 10-year yield stood
at 94 basis points, near a 13-year high of 95 basis points hit
last week on speculation of more aggressive easing by the Bank
* Such speculation was sparked after Prime Minister
Yoshihiko Noda earlier this month called an election on Dec 16.
as main opposition party leader Shinzo Abe, seen as a
front-runner to become prime minister after the poll, is calling
for radical easing and setting a higher inflation target.