TOKYO: Japanese government bond prices edged up on Wednesday after a week of retreat on short-covering ahead of steps by the US Federal Reserve to provide a clearer window into official thinking on monetary policy.
The 10-year JGB yield dipped 0.5 basis point to 1.000 percent, helped by a limited amount of bargain-hunting from domestic investors after the yield rose to a six-week high of 1.005 percent.
Benchmark 10-year futures rose 0.07 point to 142.21 , though resistance from the bottom of the Ichimoku cloud looms at 142.24.
Futures do not look good on charts after their 25-day moving average on Tuesday slid below the five-day average, a so-called death cross, for the first time since November, though there has not been any follow-through selling yet, said a trader at a European brokerage.
"I thought hedge fund types would sell futures on the death cross. But we haven't seen that happening so far. I guess many people are waiting for the FOMC now," the trader said.
The Fed, which concludes a two-day policy meeting on Wednesday, is expected to signal that interest rates will be held near zero into 2014 with its new release of policymaker projections for the path of benchmark US interest rates and views on when the first rate hike should occur.
Some market players think it may also announce an agreed target for inflation, which would likely be in the 1.7 to 2 percent range that the majority of Fed officials have already said is desirable.
"It's a big support for bonds that the world's central banks, including those in emerging markets, are showing a bias towards easy policy," said Takeo Okuhara, fund manager at Daiwa SB Investments.
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