TOKYO: Japanese government bonds were steady on Monday but are seen likely to face pressure this week from stronger stocks and the yen's slide to a nine-month low against the dollar, moves triggered in part by the Bank of Japan's surprise easing earlier this month.
The Nikkei share average rose to a fresh seven-month high on Monday, extending this month's gains of more than 10 percent.
Reuters weekly JGB survey showed sentiment darkened further as stocks surged and the yen weakened, with those responding expecting the 10-year JGB yield to rise to 0.990 percent by the end of the week.
The yield curve is seen likely to steepen as long-term bond yields rise while the short and medium end of the curve will be capped after the BoJ easing, the survey showed.
Looking ahead, market particpants do not expect aggressive moves ahead of key events on Wednesday. The European central Bank will hold its second three-year auction of funds known as a long-term refinancing operation, or LTRO.
Also on Wednesday, Federal Reserve Chairman Ben Bernanke will address policymakers.
"No one wants to be wrong-footed ahead of this heavy calendar," said Shogo Fujita, chief Japan bond strategist at Bank of America Merrill Lynch.
The yield on the latest 10-year JGBs was flat at 0.970 percent, holding well above a 14-month low of 0.935 percent hit last month. Ten-year JGB futures were also flat at 142.54, with support at their 25-day moving average of 142.53 and resistance at the 10-day moving average of 142.62.
The yield on the 20-year note was unchanged 1.755 percent .
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