TOKYO Nov 29 Japanese government bond were
slightly higher on Thursday, nudging benchmark 10-year yields to
a 9-1/2-year low, as month-end buying supported prices.
* The superlong sector was steady but lagged gains as
investors continued to expect pressure on the Bank of Japan for
more aggressive easing steps after the Dec 16 election, at which
the ruling party is expected to fare poorly.
* "Month-end buying will support prices this week, but there
are still expectations of more BOJ easing to come, which will
weigh on prices at the long end," said a fixed income fund
manager at a Japanese trust bank.
"Everyone is waiting for the 10-year auction next week, and
those who had hoped to buy at higher yield levels might be
disappointed," he added.
* The benchmark 10-year JGB futures price ended
morning trade up 0.05 point to 144.84, briefly rising to 144.87,
their highest level since June 2003, when they hit a record high
* The current 10-year cash JGB yield inched down half a
basis point to 0.710 percent, its lowest level
since June 2003. Benchmark yields fell as low as 0.430 percent
* Yields on 20-year bonds were flat at 1.665 percent
, with their spread over 10-year yields ticking up
to 95.5 basis points, the widest since July 1999.
* The BOJ set a 1 percent inflation target in February and
has eased monetary policy four times so far this year.
But BOJ board member Sayuri Shirai said on Thursday there
was a risk that price growth could undershoot the central bank's
forecast, as the overseas slowdown keeps the economy on a weak
* Weekly capital flows data released by the Ministry of
Finance on Thursday showed that Japanese investors remained net
buyers of foreign bonds for the seventh straight week, buying a
net 115.3 billion yen in the week through Nov. 24.