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JGBs modestly weaker ahead of BOJ decision

Thursday, 19 Dec 2013 | 9:48 PM ET

TOKYO, Dec 20 (IFR) - Japanese government bond prices ended the Friday morning session steady to slightly weaker on the back of a further rise in mid- to long-term U.S. Treasury yields overnight.

In the early morning session, several regional banks bought five- and 10-year JGBs on dips, erasing an early rise in the five-year yield.

The five-year yield was unchanged at 0.215 percent after hitting a high of 0.225 percent, while the 10-year yield added 1 basis point to 0.685 percent, near a three-month high of 0.695 percent set on Dec. 13.

Other domestic real money accounts took a wait-and-see approach ahead of the outcome of a Bank of Japan policy meeting.

The BOJ is expected to keep monetary policy steady on Friday, encouraged by an upbeat business sentiment survey that added to signs the benefits of its massive stimulus are spreading through broader sectors of the economy.

Both the 20- and 30-year yields rose 1 basis point, to 1.545 and 1.695 percent, respectively.

Overnight, the 10-year U.S. Treasury yield jumped as high as 2.9512 percent, hitting a three-month peak, a day after the Federal Reserve said it would trim its monthly bond-buying programme by $10 billion and signalled it might keep its key interest rate extremely low even longer than previously promised.