TOKYO Dec 11 Japanese government bonds on
Tuesday, with benchmark 10-year yields moving within half a
basis point of a 9-1/2-year low hit last week on growing
expectations of more monetary easing steps from the Bank of
* The BOJ will likely take further monetary stimulus action
at next week's meeting on Dec. 19-20, most likely by expanding
its asset-buying and lending programme, currently at 91 trillion
yen ($1.1 trillion). It could expand by another 5-10 trillion
yen, according to sources familiar with the central bank's
* The U.S. Federal Reserve is also expected to announce a
new round of Treasury securities purchases at the conclusion of
its two-day meeting that will begin later in the session.
* "Further easing by the Fed is expected, but the BOJ will
probably act no matter what the Fed does. Ahead of the BOJ
meeting, Japan will hold an election, and the outcome will
likely boost expectations of more BOJ easing next year," said a
fixed-income fund manager at a Japanese asset management firm.
* The opposition Liberal Democratic Party is likely to
secure a majority in Sunday's general election. LDP leader
Shinzo Abe, who will probably be Japan's next prime minister,
has repeatedly called on the BOJ to embark on more aggressive
efforts to stimulate the economy and beat deflation.
* Yields on 10-year JGBs shed half a basis
point to 0.690 percent, inching close to last week's low of
0.685 percent, their lowest level since June 2003.
Yields on benchmark cash bonds ended 2011 at 0.980 percent.
* Ten-year JGB futures added 0.07 point to end
morning trade at 145.26, after touching an intraday high of
145.30, the highest level ever for 10-year futures.
The December contract expires on Tuesday. The March contract
rose 0.06 point to 144.77.
The lead futures contract ended 2011 at 142.41.
* The 30-year sector outperformed, as brokers who abstained
from buying at last week's 30-year auction covered short
positions, market participants said.
Yields on 30-year JGBs fell 1.5 basis points
to 1.880 percent.
The 20-year yield was flat at 1.650 percent.