Japanese govt bonds end morning lower on GDP, interest rate conjecture |
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Published
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Wed, 09 May 2007 04:15
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TOKYO (XFN-ASIA) - Japanese government bond prices ended the morning session lower amid conjecture that the GDP data due out next week will show that the economy was stronger than expected in the first quarter, dealers said.But the selling was limited because many investors kept to the sidelines to await the outcome of the US Federal Reserve's meeting later today, dealers said. Overnight, US Treasury bond prices rose on hopes of a cut in US interest rates.At the break here, the yield on the benchmark 10-year bond was at 1.665 pct, up from 1.650 pct at the close yesterday.The yield on the two-year bond had risen to 0.860 pct from 0.850 pct and the yield on the lead five-year note had edged up to 1.230 pct from 1.215 pct.The yield on the bellwether 20-year bond had risen to 2.100 pct from 2.085 pct and the yield on the 30-year bond was at 2.320 pct, up from 2.305 pct.Bond prices move inversely to yields.The price of the June futures contract for the 10-year bond had slipped to 134.04 yen from 134.22 yen at the close yesterday.Naomi Hasegawa, senior strategist at Mitsubishi UFJ Securities, said: 'There seems to be speculation about a sooner-than-expected hike in [Japanese] interest rates behind the selling in the fixed-income market.'Some investors moved to factor-in the possibility of higher-than-expected first-quarter GDP figures and firm figures for machinery orders in March, which may entail an increase in interest rates by the Bank of Japan in the near future, dealers said.The yen's rise in foreign exchange trading during the morning session also fueled conjecture that an increase in interest rates is imminent, dealers said.(1 usd = 119.76 yen)yumiko.nishitani@xfn.com
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European govt bonds remain lower as investors focus on strong euro zone data 