Wednesday, 07 March 2012 11:09
TOKYO: Japanese government bonds gained on Wednesday, sending the 5-year yield to a 16-month low, as fears about the progress of Greece's credit bailout and slowing global growth added to the safe-haven appeal of fixed-income assets.
The 5-year yield skidded one basis point to 0.285 percent, though the yield is seen unlikely to fall much further as some investors sell ahead of the finance ministry's auction of 2.5 trillion yen ($30.97 billion) of 5-year notes on Thursday.
"The auction will be safe as usual lately, probably with a 3 percent coupon," said a portfolio manager at a Japanese asset management firm.
"But for now, JGBs are tracking risk-off," he added.
Investors await a decision by Greece's private creditors, who have until Thursday night to decide to participate in a bond swap Greece needs to do in order to secure bailout funds to avoid a chaotic default on March 20. Some Greek pension funds ...