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JGBs inch down on BOJ disappointment, 10-yr yield off 3-week low
July 12, 2013 / 2:20 AM / in 4 years

JGBs inch down on BOJ disappointment, 10-yr yield off 3-week low

TOKYO, July 12 (Reuters) - Japanese government bond prices dipped slightly on Friday, on disappointment over the Bank of Japan’s bond buying offer and profit-taking after gains in the past few days, lifting the 10-year yield off three-week lows.

* The 10-year JGB futures fell 0.17 in price to 142.95 while the yield on the 10-year cash bond rose 1.5 basis points to 0.830 percent, off three-week low of 0.815 percent hit on Thursday and again earlier on Friday.

* The market slipped after the BOJ announced its bond buying offer, which did not include purchase in 5-10 year maturities as some traders had hoped.

* Investors also took profits as the cash bond yield had reached near the bottom of its rough 0.8-0.9 percent trading range since late May.

* “If you look just at economic fundamentals, the world’s industrial production looks set to keep recovering at least until the year-end and interest rates will naturally face upward pressure,” said Tomohiro Miyasaka, fixed income analyst at Credit Suisse.

* “There is downside risk in China but many investors should be expecting a gradual rise in bond yields,” he added.

* Hopes of a recovery in the Japanese economy also pushed Japanese shares to seven-week highs.

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