JGBs steady after Abe's upper house election win
TOKYO, July 22 (Reuters) - Japanese government bonds were largely steady on Monday after Prime Minister Shinzo Abe was handed a stronger mandate to continue his aggressive push to revive the world's third-largest economy.
* Yields on benchmark 10-year bonds were unchanged at 0.800 percent, while 10-year futures were up 0.11 point at 143.55, hitting a two-month high and holding above their five-day moving average of 143.34.
* The Bank of Japan on Monday offered to buy 650 billion yen ($6.47 billion) worth of JGBs with residual maturities of five to 10 years and more than 10 years, as part of its radical plan to pull the country out of deflation.
* The five-year yield ticked down 0.5 basis point to 0.280 percent, hitting a six-week low.
* "The results of the upper house election were in line with expectations, so there was no surprise. The bond market participants were waiting for any fresh reaction from equities or FX markets," said Naomi Muguruma, senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.
"But both the markets are muted, so that's why there is no fresh trading incentives for the JGB market." Tokyo's Nikkei share average was up 0.1 percent in late morning trade.
* Public broadcaster NHK said early on Monday that Abe's Liberal Democratic Party (LDP) and its coalition partner, the New Komeito party, had won 76 of the 121 seats up for grabs in the 242-seat upper house.
With the coalition's uncontested 59 seats, that ensures it a comfortable majority, tightening Abe's grip on power and raising the chances of a long-term Japanese leader for the first time since the reformist Junichiro Koizumi's rare five-year term ended in 2006.
* The 10-year yield has been boxed in a range of 0.80 to 0.90 percent since late May after dropping to a record low of 0.315 percent a day after the BOJ unveiled its massive easing scheme in early April, and then climbed to a high of 1.0 percent on May 23.
* "If we see the (10-year) yield go up above 0.85 percent, there should be buy-on-dips demand," Muguruma said, but adding that it was likely to stay in the range between 0.80 to 0.85 percent in the past seven trading sessions for sometime.
* The 30-year yield dipped 0.5 basis point to 1.830 percent, while the 20-year yield was unchanged at 1.715 percent.
* The head of Japan's life insurance association said late on Friday that Japanese life insurers were unlikely to be thinking of increasing their foreign bond holdings by large amounts with domestic debt yields offering reasonable returns.