(Corrects forecast for 10-year yield in fourth paragraph to
TOKYO Jan 7 A weekly gauge of sentiment in the
Japanese government bond market skidded to its lowest level
since July, the latest Reuters poll showed on Monday.
The poll's JGB bull-bear diffusion index, calculated by
subtracting the number of bearish market players from those who
are bullish, came in at minus 54, its lowest reading
since minus 61 in the July 2 survey.
In the Dec. 25 survey, the bull-bear index came in at plus 4
, which was its first positive reading since late
The median forecast for the benchmark 10-year JGB yield at
the end of this week is 0.850 percent, 1.5 basis
points above Friday's closing level of 0.835 percent
. The yield hit a four-and-a-half-month high of
0.840 percent on Monday morning, up half a basis point.
The survey found that 66.7 percent of respondents expect JGB
yields to rise this week, up from 24.1 percent in the previous
Some 20.5 percent expect yields to trade sideways this week,
down from 48.3 percent in the previous poll, while 12.8 percent
expect them to fall, down from 27.6 percent.
JGBs have been pressured by concerns that Japan's new
government headed by Prime Minister Shinzo Abe will increase
debt issuance to fund massive fiscal stimulus.
On the supply side, the Ministry of Finance will hold an
auction of 10-year bonds on Tuesday this week.
JGBs have also been pressured by a recent drop in U.S.
Treasuries prices, with benchmark yields rising to eight-month
highs last week on worries the U.S. Federal Reserve could pare
its asset purchases within 2013 if the economy improves.
The online survey of 97 JGB market participants from major
institutions received 39 responses, for a response rate of 40.2
percent. These included 19 "real money" investors from
institutions such as banks, pension and investment funds and
The latest survey was conducted from Friday to 8:00 a.m. on
Monday (2300 GMT on Sunday). The previous survey was released on
Dec. 25, as there was no survey last week due to the long
Japanese New Year's holiday. Tokyo markets opened for 2013
trading on Jan. 4.
(Reporting by Yoshiyasu Shida; Writing by Lisa Twaronite;
Editing by Jacqueline Wong)