TOKYO Dec 3 Japanese government bonds slipped
slightly on Monday ahead of auctions of longer maturities later
this week, with benchmark yields rising above a 9-1/2-year low
touched on Friday.
* The current 10-year cash JGB yield rose
half a basis point to 0.710 percent, moving away from Friday's
intraday low of 0.695 percent, which was its lowest level since
June 2003 and the first time since then that it fell below 0.70
* The Ministry of Finance will offer 2.3 trillion yen of
10-year bonds on Tuesday and 700 billion yen of 30-year bonds on
* The benchmark 10-year JGB futures price ended
morning trade down 0.03 point at 144.83 after earlier rising to
144.90, its highest level since June 2003. Futures are not far
from their record high of 145.09, also hit that month.
* The yield curve continued to steepen, with yields on
20-year bonds and 30-year bonds
both rising 1.5 basis points to 1.685 percent and 1.955 percent
* The curve is likely to stay steep ahead of a general
election on Dec. 16. Shinzo Abe, leader of the main opposition
Liberal Democratic Party (LDP) and the front-runner to be
Japan's next prime minister, has called on the Bank of Japan to
take more drastic easing steps. This has pressured the yen as
well as prices of superlong JGBs.
The latest polls showed the LDP still ahead, although its
lead over the ruling party and a new group led by a nationalist
former governor of Tokyo narrowed with two weeks left before the
* "There are people who want to buy at the 10-year auction,
even with yields at these low levels," said a fixed-income fund
manager at a Japanese trust bank.
"Ahead of the election, we are probably not going to see any
big movements in JGBs," he said.
* A weekly gauge of sentiment in the Japanese government
bond market remained negative but showed a slight improvement,
with benchmark yields expected to stay in recent ranges ahead of
this week's auctions.