JGBs stay in tight ranges ahead of Fed, BOJ this week

Reuters

TOKYO, Oct 28 (IFR) - Japanese government bond prices weresteady to slightly lower on Monday, staying in narrow ranges asinvestors awaited U.S. and Japanese central bank meetings thisweek.

The 20-year JGBs initially advanced on short-covering bydealers, sending their yield down 0.5 basis point to 1.475percent, but turned softer on sporadicprofit-taking by some players, traders and money managers said.

As widely expected, the Bank of Japan offered to buy 200billion yen ($2.1 billion) in JGBs maturing in more than 10years under its massive JGB-buying programme.

Money managers at domestic life insurers and pension fundswere largely staying to the sidelines ahead of the FederalReserve's meeting on Tuesday and Wednesday and the BOJ's meetingon Thursday to review its semiannual economic outlook.

One regional banker said he does not expect 10-year JGByields to rise sharply in the foreseeable future. He believesthat the BOJ has the depth to absorb most of selling in thesecondary market in that zone.

At midday, the yield on the current five-year JGBs wasunchanged from Friday at 0.205 percent, while the10-year yield rose 0.5 basis point to 0.615 percent.

In the superlong zone, the 20-year yield was up 0.5 basispoint at 1.485 percent and the 30-year yield was flat at 1.625percent.

Lead December JGB futures moved in a narrow range between144.81 and 144.89 before finishing the morning session up 0.02point at 144.85. In the morning session, JGB futures movedmostly in tandem with cash JGBs.

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