JGB futures down on Treasuries; assess disaster cost

TOKYO, April 6 (Reuters) – Japanese government bond futures
fell on Wednesday, hurt by a slide in U.S. Treasuries, but cash
bonds were mixed with the market lacking clear direction as
players were still assessing how Japan will map out its course
on disaster relief.

* June 10-year bond futures (2JGBv1: Quote, Profile, Research) fell 0.17 point to
139.10, holding near a three-week low as weak U.S. Treasuries
weighed.

* A 10-year bond auction on Tuesday showed strong investor
appetite, but participants otherwise held off from active buying
given expectations that JGBs would remain under pressure from
Japan’s heavy fiscal burden, which is expected to mount with
post-quake reconstruction efforts.

* At Tuesday’s auction, players were seen making room in
their books to place bids for 10-year bonds by selling other
maturities.

* “Even though the auction result was good, the bids didn’t
last as participants are still cautious about the situation
surrounding disaster relief and government plans,” said a fund
manager of a foreign asset management.

* Cash bonds were mixed with the 10-year yield
edging up 0.5 basis point to 1.275 percent while
the 20-year yield fell 0.5 basis point to 2.060
percent.

* U.S. Treasuries fell and yields rose on Tuesday on the
view that the inflation concerns of some Federal Reserve
policymakers could cause the central bank to tighten monetary
conditions before year-end.

* Japan’s government is likely to set aside more than 3
trillion yen ($35 billion) for its first extra budget for
disaster relief, the Asahi newspaper reported on Wednesday.
Citing a government draft of the extra budget, the newspaper
also said Japan would not issue new debt to help finance the
extra budget. [ID:nL3E7F53BL]
($1 = 84.9 Japanese Yen)

(Reporting by Akiko Takeda; Editing by Edmund Klamann)

))

JGB futures down on Treasuries; assess disaster cost