Japanese govt bond prices end morning mixed ahead of FOMC rate decision |
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Wed, 31 Jan 2007 04:23
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TOKYO (AFX) - Japanese government bond prices finished the morning session mixed in cautious trade ahead of the outcome of the US Federal Open Market Committee's meeting and the release later today of key economic data such as the latest US employment figures, dealers said.Market watchers expect the FOMC to keep rates unchanged, but what they are more keen about is the accompanying statement at the end of the meeting, which they hope will provide indications of the Fed's policy intentions going forward.At the break, the yield on the benchmark 10-year bond was at 1.705 pct, unchanged from yesterday's close.The yield on the lead five-year note advanced to 1.200 pct from 1.185 pct and the yield on the two-year debt edged up to 0.740 pct from 0.735 pct.The yield on the bellwether 20-year bond slid to 2.165 pct from 2.175 pct and the yield on the 30-year bond declined to 2.425 pct from 2.435 pct.Bond prices move inversely to yields.The price of the 10-year bond futures contract inched up to 134.33 yen from 134.41 yen in late trading yesterday.Katsuhide Inadome, a strategist at Mitsubishi UFJ Securities, said shorter-dated notes were easier today after German finance minister Peer Steinbrueck reiterated that G7 finance ministers will discuss the fall of the yen at their meeting in Essen, Germany next week, raising concerns that the prolonged low interest rates in Japan -- the main reason for the yen's weakness -- may also be discussed at that meeting.Dealers said the market was also wary about the possibility of a rate hike at the Bank of Japan's next policy board meeting in February despite the set of weak economic data recently.'While we think the possibility of a rate hike in February is reasonably low, the market feels there is the risk of an increase,' Inadome said.Data released yesterday showed that household declined in December, the unemployment rate inched up in the same month, while industrial output was forecast to drop dramatically in January.'The market also feels that the outcome of real GDP data for the October-December quarter could revive the prospect for a rate hike,' Inadome said.On the other hand, longer tenors were in good demand mainly from institutional investors ahead of the approaching account book closings in March, dealers said.(1 usd = 121.66 yen)yasuhiko.seki@xfn.comxfnys/xfnzr
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Japanese govt bonds end morning lower ahead of BoJ rate decision, auction 