TOKYO: Japanese government bonds edged down on Wednesday as some investors sold ahead of an auction of 40-year bonds later in the week, making room to buy the longer duration.
Japan's Ministry of Finance will auction 400 billion yen ($5.2 billion) of bonds on Thursday.
"There is some concern how demand will be, as liquidity is not great, with a limited number of end-users," said Naomi Hasegawa, a senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. "The market has started to adjust, preparing for the auction."
"We expect fair demand, not fantastic, but not disastrous," she added.
Ten-year JGB futures were down 0.10 at 142.38, still supported on charts by their daily Ichimoku cloud at 142.30-142.33.
The 10-year cash bond yield climbed one basis point to 0.980 percent, moving further away from a 14-month low of 0.935 percent hit last month.
Prices were also undermined by an overnight dip in US Treasuries as Greece appeared close to a new bailout package. But Greek leaders have yet to approve a deal and investors remain cautious about the risk of a disorderly default.
The five-year JGB yield was up half a basis point at 0.340 percent. The 20-year yield rose half a point to 1.740 percent.
The 30-year bond yield added one basis points to 1.915 percent, moving further away from a four-month low of 1.880 percent hit last week.
Data released early in the session showed Japan's current account surplus shrank sharply in 2011 to its smallest in 15 years as weak exports and surging fuel imports led to a trade deficit.
The surplus fell 44 percent to 9.6289 trillion yen ($125 billion) last year, marking its biggest fall on record, although income from overseas investment still more than offset the trade deficit.
While the short-term market impact was muted, the data raised worries about Japan's ability to fund its huge public debt going forward.
Comments
Comments are closed for this article.