(Corrects 10-year yield's three-month low level to 0.720 pct in
* Ten-year JGB yield falls, near 3-month low
* Both 20, 30-year yields slip 1.5 basis points
* Syria has little impact on JGB markets
By Dominic Lau
TOKYO, Aug 27 Japanese government bond prices
rose on Tuesday after a robust 20-year debt auction, while
expectations that the Bank of Japan would carry out bond-buying
operations the following day as part of its programme to spur
growth also boosted sentiment.
The Ministry of Finance sold 1.2 trillion yen ($12.2
billion) worth of 20-year bonds, with a bid-to-cover ratio of
3.39, up from its previous auction of 2.61.
The 20-year yield slipped 1.5 basis points to
1.680 percent, a one-week low. Longer-dated 30-year yield
was also down 1.5 basis points, at 1.795 percent.
"We just passed the auction. The BOJ bond purchase above the
10-year sector is expected to come tomorrow," said Tomohisa
Fujiki, interest rate strategist at BNP Paribas in Tokyo, adding
that month-end buying was another factor helping the market.
"Those should be the factors supporting the market rather
than the Syrian issue at the moment," he said.
The United States put Syrian President Bashar al-Assad on
notice on Monday that it believes he was responsible for using
chemical weapons against civilians last week, raising the
prospects of U.S. military intervention in the Syrian conflict.
Increased tensions over Syria appeared to weigh on regional
equity markets, with Asian shares as measured by MSCI
Asia-Pacific ex-Japan index down 1.1 percent.
"The Bank of Japan will buy tomorrow in the 10, 20-year
sectors, so dealers have no concerns about today's auction,"
said a fixed-income fund manager at a Japanese asset management
firm in Tokyo.
The Japanese central bank stunned financial markets on April
4 by promising to inject $1.4 trillion into the world's
third-largest economy in less than two years to revive growth.
The 10-year yield fell 1.5 basis points to
0.745 percent, edging near a three-month low of 0.720 percent
reached on Aug. 21. The five-year yield dipped 0.5
basis points to 0.290 percent.
Ten-year JGB futures, also helped by gains in U.S.
Treasuries overnight after softer-than-expected durable goods
orders in July, rose 0.24 point to 143.99, breaking above their
five-day moving average of 143.90.
Trading volume in 10-year futures was relatively active,
with 23,116 contracts changing hands, up from Monday's 11,970
but down from a three-week high of 27,308 reached on Friday.
U.S. orders for long-lasting manufactured goods fell 7.3
percent last month, more than the 4 percent fall forecast by
economists polled by Reuters.
The data, which came after last week's figures showed a
sharp decline in July new-home sales, raised some doubts about
whether the U.S. Federal Reserve will start to reduce its $85
billion monthly bond-buying programme as soon as next month.
($1 = 98.5350 Japanese yen)
(Editing by Stephen Coates)