March 25, 2014 / 3:50 AM / in 4 years

JGBs tread water, capped by Nikkei's rebound

TOKYO, March 25 (IFR) - Japanese government bond prices were little changed across the board on Tuesday, handing back modest gains made earlier as Tokyo stocks clawed out of the red.

JGB 10-year futures dipped 0.02 point to 144.93. The contracts earlier hit a high of 144.90 on overnight gains by U.S. Treasuries and a weaker start to the Nikkei stock average .

The benchmark 10-year cash bond yield rose half a basis point to 0.610 percent.

JGB market participants expect the bond market to remain trapped in a narrow range this week as many investors have already closed their books ahead of the month’s end, when Japan’s fiscal year ends.

Another factor that contributed to the wait-and-see mood was the 300 billion yen ($2.93 billion) liquidity-enhancing auction conducted by the Ministry of Finance.

The MOF regularly issues extra amounts of outstanding JGBs deemed to be drawing relatively high investor demand in a bid to improve market liquidity.

$1 = 102.2350 Japanese Yen Reporting by Masatsugu Hisatsune; Editing by Richard Borsuk

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