TOKYO, Aug 6 (Reuters) – Japan’s government bond yields
edged higher on Monday after stronger-than-expected U.S. jobs
data eased concerns over slowing growth in the world’s largest
economy, while growing optimism for European action boosted risk
appetite.
* However, the sell-off in JGBs was relatively tame, despite
a 1.9 percent rise in Tokyo’s Nikkei average, as
analysts said investors needed to see more evidence of stronger
global growth and many of them were behind in their purchase of
JGBs as the first half of Japan’s fiscal year approaches,
prompting them to buy on dips.
* The 10-year yield added 1 basis point to
0.740 percent, while 10-year JGB futures fell 9 ticks
to 144.42, holding above their 20-day moving average at 144.33.
* “June’s nonfarm payroll was revised down, so the overall
pace of employment increase in the U.S. is still insufficient
for a sustainable economic recovery,” said Naomi Muguruma,
senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley
Securities.
* U.S. employers hired the most workers in five months in
July, but an increase in the jobless rate to 8.3 percent kept
prospects of further monetary stimulus from the Federal Reserve
on the table.
* “I think JGB market participants think that there is a
good chance for the Fed to decide additional easing at its next
meeting in September,” Muguruma said.
“Also there is some speculation for the BOJ meeting this
week … The consensus is that the BOJ is expected to stay pat
this time but many market participants think it is just a matter
of time before the BOJ either expands its buying of JGBs or
removes the minimum bid yields for its purchase operations.”
* The Bank of Japan, which is due to conclude its two-day
meeting on Thursday, is expected to keep monetary policy steady
but may escalate its warnings over slowing global demand and
renewed gains in the yen, signalling its readiness to ease again
if the economy’s recovery comes under threat.
* Yields on both 20- and 30-year bonds
ticked up 1 basis point, to 1.575 and 1.790
percent, respectively.
* Austrian Chancellor Werner Faymann thinks German
Chancellor Angela Merkel will drop opposition to measures such
as giving the euro zone’s permanent bailout fund a banking
licence if that is what is needed to save the euro, he told a
newspaper.
