July 26, 2019 / 5:13 AM / a month ago

JGB futures set for weekly gains on global monetary easing hopes

TOKYO, July 26 (Reuters) - Japanese government bond prices were flat on Friday, but benchmark futures contracts were on course for their second weekly gain due to by expectations that major central banks will ease policy in coming months, pushing global bond yields lower.

Ten-year JGB futures edged up 0.01 point to 153.75 on Friday, with a trading volume of 13,605 lots. For the week, benchmark futures were up 0.12 point. Futures contracts rose by the same margin last week.

The 10-year JGB yield was flat at minus 0.155%. The benchmark two-year JGB yield was flat at minus 0.215%.

At the long end of the curve, the 40-year JGB yield was flat at 0.390%.

The U.S.-China trade war has put a dent in the global economic outlook, which is pushing central banks toward easing monetary policy to prevent low inflation from slowing further.

An interest rate cut at the European Central Bank’s next meeting in September appeared certain, sources told Reuters.

The Bank of Japan, which is divided over whether to ease policy, will announce its next policy decision on July 30.

The Federal Reserve is widely expected to lower its target range of 2.25%-2.50% by 25 basis points at a meeting ending July 31.

Investors are also betting on rate cuts in Australia and New Zealand. The combined monetary easing will contribute to a further decline in bond yields globally, some traders say. (Reporting by the Tokyo Markets Team, Editing by Sherry Jacob-Phillips)

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