TOKYO, July 29 Japanese government bond prices
inched higher on Monday, helped by a slide in Tokyo's Nikkei
share average as the yen hit a one-month high against the dollar
on expectations of dovish comments from the U.S. Federal
Reserve's policy meeting this week.
* An offer by the Bank of Japan to buy 450 billion yen ($4.6
billion) of JGBs with residual maturities of five to 10 years
also supported the market.
* The 10-year yield dipped 0.5 basis point to
0.780 percent, while the Nikkei shed 2.6 percent and the
yen strengthened to a one-month high of 97.645 yen to the
* "The Japanese equity market is heading lower and the
dollar/yen broke the 98 yen level. These factors are supporting
the JGB market," said Tomohisa Fujiki, interest rate strategist
at BNP Paribas in Tokyo. "But at the same time there have been
some reports that the consumption tax hike is not a done deal
* Japan's most significant fiscal reform in years -- a
planned increase in the country's sales tax -- could be delayed
or watered down in a move that might rattle financial markets
and amount to an own goal for the prime minister.
* The 10-year JGB futures were up 0.13 point at
143.76, holding above their five-day moving average of 143.68.
* Japanese retail sales rose 1.6 percent in June from a year
earlier, at their fastest pace since May 2012, in a sign that
expectations for economic recovery are underpinning consumer
* U.S. Federal Reserve policymakers are likely to have a
lively debate on how best to prepare financial markets for a
reduction of their bond-buying programme, but appear certain to
wait for further economic data before curtailing their stimulus.
The Fed releases its post-meeting statement at 1800 GMT on
* Among the key U.S. data this week are the second quarter
GDP on Wednesday and the June non-farm payroll report on Friday.
* The 30-year yield was down 0.5 basis point
to 1.820 percent, while the 20-year yield was
unchanged at 1.705 percent after earlier falling to 1.700
percent, a level which it has not been able to trade below since