* 20-yr yield slips to 2-month low on bargain-hunting after
* 10-yr futures end higher after touching more than 2-month
TOKYO Feb 22 Japan government bonds rose on
Friday, with the benchmark yield dropping to a four-week low in
line with firmer U.S. Treasury prices on fading fears the U.S.
central bank will curb its asset buying soon.
Treasuries rose on Thursday following several U.S. data
pointing to slow economic growth, such as weekly jobless claims
and factory activity, which calmed bond investors' fears that
the U.S. Federal Reserve would reduce to halt its asset
purchases before the end of this year.
"The Bank of Japan will ease further, and the Fed will keep
its easy policy for the time being, and this is supportive for
bonds," said a fixed-income fund manager at a European asset
management firm in Tokyo.
The yield on 10-year bonds shed 1 basis point
to 0.725 percent after earlier falling to 0.720 percent, its
lowest since Jan. 25.
Ten-year JGB futures ended up 0.07 point at 144.50,
after rising as high as 144.60 in the morning session, their
highest since Dec. 13.
Futures are now above both their 55-day moving average at
144.23 as well as their 100-day moving average, now at 144.26.
The superlong tenor rebounded on bargain-hunting after
underperforming in the previous session following a lacklustre
20-year sale. Life insurers were said to be buyers, market
The 30-year yield fell half a basis point to
1.935 percent after dropping as low as 1.905 percent. The
20-year yield slipped 1.5 basis points to 1.730
percent after dropping to 1.720 percent earlier, its lowest
since Dec. 21.
"Expectations of this yen depreciation path reversing,
that's also helping strength in the superlong tenor, mainly
driven to swaps, but this strength in cash bonds is probably
supported by stable buyers," said Maki Shimizu, senior
strategist at Citigroup Global Markets Japan.
The dollar failed to advance much against the yen as the
Japanese currency's three-month-old declining trend on monetary
easing expectations is showing signs of losing momentum. The
dollar stood little changed at 93.29 yen, keeping some
distance from its 33-month high of 94.47 hit last week.
The yield on the five-year JGB was flat at a
record low of 0.130 percent hit earlier this week, on
expectations that the Bank of Japan will eventually increase the
time left to maturity - currently three years - of JGBs bought
in its asset purchase programme.
Economics Minister Akira Amari kept the government's heat on
the central bank on Friday, telling reporters after a regular
cabinet meeting that "decisive steps" by the BOJ would help
raise people's inflation expectations.
The BOJ doubled its inflation target to 2 percent in January
and made an open-ended pledge to buy assets from next year in an
attempt to pull the country out of deflation.