JGBs drop ahead of 10-year sale with coupon set at 0.8 percent
TOKYO, Oct 4 (Reuters) - Japanese government bonds slipped slightly on Thursday with benchmark yields moving away from an eight-week low touched earlier this week as investors sold to make room in their portfolios for buying at a 10-year sale.
* The Ministry of Finance offered 2.3 trillion yen ($29.3 billion) of reopened 10-year notes with a coupon of 0.80 percent, matching that of the previous three sales.
* "Demand at this sale should be strong, as the 10-year is the most appealing and liquid sector right now," said a fixed-income fund manager at a Japanese asset management firm.
* Since the previous sale, the 10-year yield has fallen and the sector's carry and rolldown is higher relative to other maturities, strategists at Bank of American Merrill Lynch wrote in a note to clients.
"The risk-adjusted expected return of the 10-year sector is getting more attractive as volatility has decreased and the intermediate part of the curve has flattened," they said.
* In cash bond trading, the 10-year yield added half a basis point to 0.770 percent, moving away from the 0.755 percent level touched on Tuesday and Wednesday, which was its lowest level since Aug. 7.
* Ten-year JGB futures ended morning trade down 0.10 point at 144.15, moving away from an eight-week high of 144.33 hit on Wednesday.
* The 20-year bond yield was flat at 1.650 percent while the 30-year yield added half a basis point to 1.910 percent. ($1 = 78.610 Japanese yen) (Reporting by Lisa Twaronite)
Keywords: MARKETS JAPAN JGB/