TOKYO: Japanese government bonds were mostly firmer on Monday, with futures extending gains and marking a fresh multi-month high as month-end demand and safe-haven appetite from investors remained as support, though advances were capped as profit-taking emerged amid early signs of overbuying.
* "We expect JGBs to remain firm on investor demand earlier this week," said Katsutoshi Inadome, fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.
* Thirty-eight percent of market players expect Japanese government bond yields to fall this week and 28 percent think they will rise, while the remainder see them unchanged, a Reuters survey showed on Monday, backing up the recent firmness in the JGB market.
* Uncertainty over Greece's debt problems and rising US Treasury prices continued to help JGBs. US Treasuries extended their rally on Friday as more money flowed out of European bonds and equities and into safe-haven US debt, with the benchmark 10-year US Treasury note closing at its lowest since November.
* Market participants will look closely at whether Greece can avoid becoming the first euro zone country to default on its debt as it votes on a package of harsh austerity measures due on Wednesday and Thursday.
* September 10-year JGB futures were up 0.12 point at 141.43, after hitting a fresh 6-1/2 month high of 141.47. Charts show bullish signs, although overbought signals are emerging on oscillators such as the RSI.
* Domestic regional banks were seen driving profit-taking.
* The benchmark 10-year yield declined 1 basis point to 1.095 percent , matching a seven-month low marked on Friday.
* Players will likely shift their focus to Japanese economic indicators later this week to gauge how fast the country's economy will recover from the March earthquake and tsunami. Analysts said increases in industrial production for May and June are within their expectations, but that JGBs might be weighed if July's figures show an increase as this could spur talk of a V-shaped recovery. For Japan economic indicators for June 27 week.
Copyright Reuters, 2011
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