Japanese government bond rises, 30-year debt auction considered

By IVCPOST Staff Reporter

Jul 06, 2013 11:13 AM EDT

On Thursday, benchmark Japanese government bond prices increased. Although the improvement was capped by warning on matters about the supply, the finance ministry still organized an auction of a 30-year debt.

The Ministry of Finance proposed JPY600 billion equivalent to US$6.02 billion worth of 30-year bonds. The sale included a coupon of 1.9%.

According to Merrill Lynch, a strategist at Bank of America, several venture capitalists were not pressured to quickly purchase bonds. This was due to the fact that July was just the beginning of a new quarter.

"Although the 30-year JGB is a BUY in terms of price, some investors intend to stay on the sidelines for the auction and purchase in the secondary market, so we expect satisfactory results backed by cost-averaging demand," Lynch wrote for her clients.

The 10-year earnings lost half a basis point to 0.875%. This hindered in the 0.80% to 0.90% trading range where it was stuck for more than a month.

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