TOKYO, Nov 13 (Reuters) – Japanese government bond prices
edged lower on Tuesday, hurt by speculation that Prime Minister
Yoshihiko Noda may soon dissolve the parliament and hold a snap
election by the end of year.
* Opinion polls have shown the conservative opposition
Liberal Democratic Party, which some market players worry is
less committed to fiscal belt-tightening such as planned tax
hikes, is expected to beat Noda’s Democratic Party of Japan.
* Market players also expects LDP leader Shinzo Abe to put
bigger pressure on the Bank of Japan to enhance monetary easing.
Abe has said he thinks inflation target of 3 percent would be
desirable.
* “The market is clearly reacting to the news that
dissolution of the parliament is likely. At the moment, Abe
looks set to become next prime minister and he is likely to put
more pressure on the BOJ,” said a trader at a Japanese bank.
* The 10-year JGB futures fell more than 10 pips at one
point to as low as 144.47, before paring losses to stand at
144.56, still down 0.02 point.
* The 10-year yield stood at 0.730 percent,
up 0.5 basis point from Monday’s settlement yield of 0.725
percent, though there was no trade at that level on Monday.
