JGBs fall as Nikkei rises, 10-yr auction in focus

TOKYO, Feb 2 (BestGrowthStock) – Japanese government bond futures
fell on Tuesday, slipping further from a one-month peak hit last
week, as stocks rose and U.S. Treasuries fell after
better-than-expected U.S. manufacturing data.

* One focal point on Tuesday is a 2.2 trillion yen ($24.3
billion) 10-year JGB auction. Traders expected the coupon to be
set at 1.3 percent, unchanged from the last two auctions of the
maturity.

* If the coupon is 1.3 percent, the notes would be sold in a
second reopening of the current No.305 issue. That could dent
demand at Tuesday’s debt sale as investors already hold large
amounts in the issue.

* Still, analysts said the auction was likely to go smoothly
as yield levels of 10-year notes looked attractive compared to
bond yields in other maturities.

* March futures slid 0.15 point to 139.25 (2JGBv1: ), having
fallen from a one-month high of 139.71 reached last week.

* The benchmark 10-year yield inched up 1 basis point to
1.340 percent as some players sold notes to make room in their
portfolios ahead of the auction.

* Tokyo’s Nikkei average (.N225: ) jumped more than 1 percent,
boosted by a rally on Wall Street the previous day, as well as
gains in Japanese exporters on a weaker yen. [.T]

* Treasuries fell on Monday after strong manufacturing data
renew inflation jitters. [US/]

Stock Market Research
(Reporting by Rika Otsuka; Editing by Michael Watson)

JGBs fall as Nikkei rises, 10-yr auction in focus