TOKYO, July 24 (Reuters) – Yields on benchmark 10-year
Japanese government bonds held at nine-year lows hit in the
previous session, with analysts saying the deepening euro zone
crisis was likely to cap yields in the near-term.
* The yields on both 20- and 30-year bonds
edged up 0.5 basis point, to 1.520 and 1.730
percent. They are still down 14.5 and 15 basis points,
respectively, so far this month.
* The 10-year yield was unchanged at 0.720
percent after ticking up 0.5 basis point earlier in the morning
session, while 10-year JGB futures pulled back slightly
from a nine-year high, down 1 tick to 144.62.
* Concerns over the euro zone sovereign debt crisis and
sluggish growth in China and the United States have lifted the
appeal of U.S. Treasuries, German Bunds and JGBs. The 10-year
JGB yield has fallen 11 basis points so far this month after
dropping 15.5 basis points in April-June.
* “I don’t expect the yield to go below 0.70 percent but it
depends on the European issue,” said a fixed-income fund manager
at a Japanese asset management firm in Tokyo.
* “The situation will continue for a while, with low
volatility and low yield. It’s attractive to take carry and the
attractive part of the curve is close to the 10-year sector,”
the fund manager said.
He said big Japanese banks, which are flushed with cash,
would likely buy the 10-year tenors for carry rather than going
after the superlong sectors or anything below 5-year maturity,
which will keep the 10-year bonds supported. Life insurers and
pension funds are the main buyers of the superlong debt.
