JGBs steady, supported by yen rise; curve steepens

* 10-yr/30-yr yield spread widens in wake of 30-yr auction

* Trend of yen strength seen supporting JGBs

* Support for 10-yr JGBs seen at 1.2 percent – trader

By Masayuki Kitano

TOKYO, Sept 9 (BestGrowthStock) – Japanese government bonds were
mostly steady to firmer on Thursday as the yen stayed near a
15-year peak against the dollar and worries simmered about the
outlook for Tokyo shares and the economy.

The yield curve steepened in the wake of the previous day’s
lacklustre auction of 30-year bonds, pushing the 10-year/30-year
yield spread up to the highest in about four months, at 89.5
basis points. (JP10YTN=JBTC: ) (JP30YTN=JBTC: ).

“It is hard for the market to try for a rebound because
longer-end bonds are not firm,” said Makoto Yamashita, chief
Japan interest rate strategist at Deutsche Securities.

“But at the same time we are not in the type of environment
where people would want to aggressively test the downside,” he
said, adding that the recent trend of yen strength and equities
weakness still seemed intact.

The benchmark 10-year JGB yield dipped 0.5 basis point to
1.120 percent (JP10YTN=JBTC: ).

The 10-year yield has rebounded since hitting a seven-year
low of 0.895 percent in late August, and touched a 2-