* 10-yr yields slip, moving away from last week’s 3-week
high
* JGB market sentiment gauge turns positive-poll
By Lisa Twaronite
TOKYO, Oct 22 (Reuters) – Japanese government bonds rose for
a second session on Monday, with benchmark yields moving away
from a three-week high touched last week, on conviction that
the Bank of Japan is committed to its easy monetary stance.
A strong 20-year auction last week also reassured investors
about supply conditions.
“The long end somewhat stabilised last week. Investors are
still concerned about the very long end, but I think the
15-to-18 year sector is an attractive area to extend into,” said
Neale Vincent, strategist at Nomura Securities in Tokyo.
BOJ Governor Masaaki Shirakawa said in a speech on Monday
that the central bank remains resolved to maintain its
ultra-easy monetary policy, keeping alive expectations of
further stimulus.
Sources familiar with BOJ thinking said the central bank
will likely trim its long-term economic and price forecasts at
its next meeting on Oct. 30, with no internal consensus yet on
whether it will ease further.
BOJ policy is expected to support the Ministry of Finance’s
sale of 2-year notes on Thursday, as the central bank buys much
of the new issuance of that maturity. The Ministry of Finance
will hold a liquidity-enhancing sale but no major auctions are
scheduled for this week.
Also underpinning JGB market sentiment, data showed Japan’s
exports fell more than expected in the year to September, while
manufacturer sentiment hits its lowest point since early 2010.
Bonds initially got a lift from weaker Japanese equities,
though the Nikkei stock average eked out a 0.1 percent
gain for its sixth straight rise, its longest streak in 13
months.
“Whenever stocks move down, there are investors who want to
buy bonds. But there aren’t so many short JGB positions that
need to be covered, or people who need to buy, so overall, the
buying is not strong,” said a fixed-income fund manager at a
Japanese trust bank.
The benchmark 10-year JGB yield fell half a
basis point to 0 .775 percent, moving away from last week’s high
of 0.795 percent, which was its highest since Sept. 25.
The 10-year JGB futures contract ended up 0.05
point at 144.02, below a session high of 144.13 but moving away
from last week’s low of 143.79, which was its lowest since Sept.
21.
The 20-year yield was flat at 1.675 percent,
while the 30-year yield was flat at 1.930
percent.
A weekly Thomson Reuters survey of JGB market sentiment
showed a gauge of mood turned positive after three readings in
negative territory, with most respondents still expecting yields
to trade sideways.
