February 18, 2013 / 3:11 AM / 5 years ago

JGBs mostly slip in line with yen; superlongs outperform

TOKYO, Feb 18 (Reuters) - Japan government bonds mostly slipped on Monday as investors rebalanced into stocks as they climbed on renewed yen depreciation, while bargain hunting supported the superlong sector.

* The Group of 20 nations did not cite Japan at its weekend meeting, when it committed to refrain from competitive devaluations and said monetary policy would be directed only at price stability and growth. Japan viewed this as tacit approval of its anti-deflation policies.

* “The G20 didn’t single out Japan, so we’re seeing a weaker yen and stronger stocks, and it’s easy to sell bonds today,” said a fixed-income fund manager at a Japanese trust bank.

“But expectations of future easing steps by the Bank of Japan continue to keep JGBs from selling off too much, and kept the long yield in its recent ranges,” he added.

* The yield on 10-year bonds added 1 basis point to 0.755 percent.

The benchmark yield remained solidly in its recent range between a then-six week low of 0.720 percent hit on Jan. 25 and a then-two week high of 0.805 percent touched on Feb. 4.

* The Nikkei stock average rose 2.3 percent, while the dollar rose 0.7 percent to 94.14 yen.

* Ten-year JGB futures slipped 0.13 point to end morning trade at 144.10.

* The 30-year yield fell 1.5 basis points to 1.920 percent, its lowest level since Dec. 13, with life insurers said to be buying, although trading was thin.

The 20-year yield was flat at 1.740 percent, matching a three-week low hit on Friday.

* The five-year yield added half a basis point to 0.145 percent, moving away from its record low of 0.135 percent hit this month, ahead of a sale in that sector on Tuesday.

* The Ministry of Finance will offer 2.7 trillion of five-year notes, increasing the monthly issue amount by 200 billion yen both this month and next, to fund the government’s extra budget.

* The 5-year yield skidded to its record low as investors bet the Bank of Japan would scrap paying interest on banks’ excess reserves as part of future policy steps aimed at beating deflation.

* Japanese Prime Minister Shinzo Abe told parliament on Monday that buying foreign bonds could be among future policy options for the BOJ, and that the government must consider revising the BOJ law guaranteeing the central bank’s independence if the BOJ cannot achieve its 2 percent inflation target.

* Former top financial bureaucrat Toshiro Muto is the leading candidate to become Japan’s next central bank governor with Abe to pick a nominee as early as this week, sources close to the process told Reuters.

* A weekly gauge of sentiment in the Japanese government bond market was steady but remained in negative territory for a seventh straight week, the latest Thomson Reuters poll showed on Monday.

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