TOKYO: Sentiment in the Japanese government bond market has improved sharply as investors expect more easing steps from the Bank of Japan, and after a slowdown in US jobs growth fed hopes of more US easing, a weekly Reuters survey showed on Monday.
The survey's JGB bull-bear diffusion index, calculated by subtracting the number of bearish market players from those that are bullish, jumped to plus 6 from minus 56 in the previous poll, which was the lowest reading since the survey began in June last year..
Bank of Japan policymakers will meet on Monday and Tuesday, and are expected to refrain from easing monetary policy, though near-term action cannot be ruled out at this meeting or the next one on April 27 as the economy is still fragile and consumer inflation is around zero.
US payrolls grew by just 120,000 in March, according to data released on Friday. That was far below the expected increase of 203,000 jobs, suggesting the Federal Reserve would be more likely to provide more monetary stimulus to support the economy.
Weaker stocks are also underpinning demand for bonds. The Nikkei stock average lost 3.9 percent last week, its worst weekly performance in eight months, and was down 1.5 percent in early trading on Monday.
About 39.1 percent of respondents expected JGB yields to fall this week, up from 11.1 percent in last week's poll, while 32.6 percent expected a rise, down from 66.7 percent.
The median forecast of market players for the 10-year JGB yield at the end of the week was 0.990 percent, compared to its close on Friday at 0.985 percent.
The online survey of 92 JGB market participants from major institutions was conducted from Friday afternoon until 8 a.m. on Monday (2300 GMT Sunday). It generated 46 responses, a response rate of 50 percent.
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