TOKYO Dec 17 Long-dated Japanese government
bond prices fell and the yield curve faced pressures to steepen
on Monday after the Liberal Democratic Party (LDP), which
favours aggressive monetary easing and more spending, won an
election by landslide.
* The LDP's policy platform is seen as negative for longest
maturities because it could, if successful, boost economic
growth, or if unsuccessful, it could just lift inflation without
* Either way, long-dated bonds are likely to suffer while
shorter maturities are likely to benefit from bolder monetary
easing, which is likely to involve more buying of short-term
* "It is easy to predict a steepening in the yield curve.
Investors know that five-year bonds are unlikely to be sold
off," said Tohru Yamamoto, chief strategist at Daiwa Securities.
* The 20-year JGB yield rose 2.0 basis point to 1.715
percent, its highest level since late April.
* The 10-year yield rose just a 0.5 basis point to 0.735
percent, highest in about three weeks and off a
nine-year low of 0.685 percent hit earlier this month.
* The spread between the 10 and 20-year yields rose to 98
basis points, near a 13-year high of 99 hit earlier this month.
* The 10-year JGB futures price fell 0.04 point to 144.26
* The LDP had won 294 seats in the 480-member lower house,
while its ally the New Komeito party took 31 seats, giving them
a two-thirds majority needed to overrule parliament's upper
house in legislation.