July 31, 2013 / 3:08 AM / 4 years ago

JGBs steady as Fed awaited; Thursday's 10-year sale eyed

TOKYO, July 31 (Reuters) - Japanese government bonds were
steady on Wednesday as investors looked toward the next
session's 10-year auction while awaiting the outcome of the U.S.
Federal Reserve meeting. 
        
    * The Ministry of Finance will offer 2.4 trillion yen
($24.48 billion) of 10-year bonds on Thursday.
  
    * The U.S. central bank's statement at the end of its
two-day policy meeting later on Wednesday could offer clues on
when the Fed might begin to taper its $85 billion per month of
asset purchases. 
    
    * Weaker U.S. debt prices would weigh on JGBs and could push
up yields here, although the two have not always moved in tandem
lately due to diverging expectations of respective monetary
policies. The Bank of Japan pledged to maintain its easy policy
to hit its target of two percent inflation within two years.
    
    * "Ahead of tomorrow's 10-year sale, we have the FOMC
outcome. I think investors won't begin to position for the sale
until the results are known," said a fixed-income fund manager
at a trust bank in Tokyo.
        
    * The benchmark 10-year yield was flat at
0.790 percent, holding above 0.770 percent touched last week,
which was its lowest since May 14. 
    The 10-year JGB futures contract ended morning
trade up 0.05 point at 143.67.     
        
    * The 30-year yield edged down half a basis
point to 1.805 percent after touching 1.800 percent, its lowest
level since June 19, while the 20-year yield was
flat after earlier inching down half a basis point to 1.695
percent, its lowest level since June 28.

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