April 23, 2013 / 2:40 AM / 5 years ago

JGBs firm, taking lead from Treasuries prices

TOKYO, April 23 (Reuters) - Japanese government bonds rose
on Tuesday, buoyed by firm U.S. Treasuries prices but capped by
concern about demand from Japanese life insurers.

    * Nippon Life Insurance Co, Japan's biggest life
insurer, said on Monday it plans to slow its increase in
domestic bond investment in the current fiscal year to March
2014, and plans to raise unhedged foreign bond purchases.
    * "There is no evidence yet that life insurers are shifting
their allocations away from JGBs, but of course this is a
concern in the longer term," said a fixed-income fund manager at
a Japanese trust bank.
    "For now, though, insurer demand seems steady, particularly
in the superlong sector," he said.
    *  Market participants have been wary that Japanese life
insurance companies would shift holdings to foreign bonds from
JGBs after the Bank of Japan shocked markets on April 4 by
vowing to double its bond holdings in two years to help it meet
its 2 percent inflation target.
    * The yield on benchmark 10-year bonds fell 1
basis point to 0.600 percent, while the 10-year futures contract
 ended morning trade up 0.18 point at 144.52.
    *  U.S. Treasuries prices stayed firm in Asian trading on
Tuesday, with the 10-year yield stuck near four-month lows, with
recent U.S. data suggesting the economy is slowing and inflation
is low. 
    * The 20-year yield fell 1.5 basis points to
1.460 percent, while the 30-year yield slipped 1
basis point to 1.590 percent.

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