TOKYO, July 9 Benchmark 10-year Japanese
government bond prices rose on Tuesday, recovering some of the
previous day's decline, helped by a rebound in U.S. Treasuries
following a sharp sell-off on the back of strong U.S. jobs data
late last week.
* The 10-year yield dipped 1 basis point to
0.870 percent. The benchmark yield gained 2.5 basis points on
Monday as it tracked a 23.3-basis point jump in the 10-year
Treasury yield on expectations that upbeat jobs data would
increase the likelihood of the Federal Reserve starting to scale
back its stimulus in the coming month.
* Gains in JGB yields were limited on Monday, however, with
the Bank of Japan buying 1 trillion yen ($9.9 billion) of JGBs
with residual maturities between one and 10 years to support the
market, as part of radical monetary policy to drag the country
out of persistent deflation.
* "In the near term, I expect the sell-off in U.S.
Treasuries will have only limited impact on the JGBs because of
the BOJ's massive buying to support the JGB market," said Yuya
Yamashita, rates strategist at JPMorgan in Tokyo.
* "Most of market participants expect such price keeping
operations if JGB market volatility heightens again," Yamashita
* The BOJ is to begin its two-day policy meeting on
Wednesday, and market participants expect the central bank to
stand pat after it stunned financial markets on April 4,
promising to inject $1.4 trillion into the economy in less than
* "They will do nothing in the upcoming monetary policy
meeting," Yamashita said. "Equities have been recovering. CPI
has been improving as seen in the May reading ... The BOJ Tankan
survey shows that the sentiment among corporates has been
* Ten-year JGB futures added 0.18 point to 142.40,
breaking above their 14-day moving average of 142.38 but holding
below their 20-day moving average of 142.47.
* The five-year yield eased 0.5 basis point to
0.320 percent, while both the 20- and 30-year yields
were unchanged at 1.755 and 1.880