JGBs fall from 2-month high on stocks, BOJ jitters

(Reuters) - JGBs extended losses as investors took profits after
concluding that bond yields have fallen too far if the BOJ
decides to lift the overnight call rate to a 12-year high of
0.75 percent in August from the current 0.50 percent.




A global slide in equity and corporate bond markets in the
past week has stirred doubts about a BOJ interest rate rise next
month, and driven benchmark JGB yields to two-month lows.


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JGBs slip as Treasuries stabilise, eye on BOJ

(Reuters) - Earlier this year Noda one was of three policymakers
dissenting in favour of a rate increase when the BOJ kept rates
on hold in January. A rate rise came the next month.




The BOJ is seen raising rates to a 12-year high of 0.75
percent from the current 0.5 percent given the economy's steady
expansion and the central bank's view that core consumer prices
will eventually start to rise.


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JGBs trim losses after BOJ vote, rate view intact

(Reuters) - BOJ Governor Toshihiko Fukui, who spoke at a news conference
following the BOJ's decision to leave interest rates unchanged at
0.5 percent, shed no new light to significantly change market
expectations for a rate hike as early as August, traders said.




"The 8-1 vote left an impression that BOJ board members were
more cautious about a rate hike than previously thought, spurring
short-covering in bonds," said Takeo Okuhara, a bond strategist
at Daiwa Institute of Research.


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Goldman's O'Neill Says BOJ Should Increase Rates Regardless of Inflation

(Bloomberg) -- The Bank of Japan should raise
interest rates gradually even if there is no sign of inflation,
said Jim O'Neill, head of global economic research at Goldman,
Sachs Group Inc.

Yields on benchmark 10-year Japanese bonds have climbed more
than a quarter-percentage point since May 17, when BOJ Governor
Toshihiko Fukui said the bank can raise rates even if consumer
prices are falling, as long as it's confident about the outlook
for the economy. A report last week showed growth expanded more
than the government's initial estimate in the first quarter.


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JGBs fall on BOJ rate view, short covering stalls

(Reuters) - Futures initially pulled further away from a seven-year low
as the market followed a gain in U.S. Treasuries, only to run
into selling by domestic banks, market participants said.




"A Treasury-led rise in early trade had its limitation as the
market continues to expect the BOJ to boost interest rates in
coming months," a senior trader at a European brokerage said.


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Yen slides to record low against the euro

(Reuters) - The yen hit a record low versus the euro on Tuesday and was stuck near a 4-1/2-year trough against the dollar as investors kept favouring carry trades funded with the low-yielding Japanese currency. The yen has fallen across the board since Bank of Japan Governor Toshihiko Fukui said late last week he had no preconceived ideas about a future rate rise, dousing expectations of a rate increase in July.

Most market players are looking for the BOJ to raise rates to a 12-year high of 0.75 percent in August, but such a move is not expected to dull the allure of carry trades -- borrowing cheap funds in the yen to buy higher-yielding currencies.


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JGB futures climb on Fukui, Treasury gains boost

(Reuters) - A rally in U.S. Treasuries on Friday also encouraged market
players to cover short positions in JGBs, which had been sold off
in the previous four weeks on a spike in global bond yields, as
well as on worries of a BOJ rate hike as early as July.




Fukui said the central bank wanted to be more convinced of
the sustainability of capital spending and consumption before
changing monetary policy, relieving some who had been worried
about an interest rate hike next month.


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Tokyo stocks to move higher on Wall Street, softer yen

(Reuters) - "The softer yen will surely help, but investors are unlikely to keep buying today as U.S. stocks could be still volatile depending on bond yield moves," he said.




"Investors are also paying attention to the BOJ governor's speech tomorrow for signs of when the central bank will raise interest rates, though it is highly unlikely it will this time."


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JGB futures dip on rate concern, fair auction helps

(Reuters) - The yield on two-year notes, the most sensitive to changes in
the monetary policy outlook, struck a decade high as nervous
investors shunned bonds with shorter maturities ahead of a
two-day BOJ policy meeting that ends on Friday.




Bond investors said ongoing weakness in Treasuries which
pushed U.S. 10-year yields near 5-year highs was also depressing
sentiment.


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JGB two-year yield hits 10-yr high on rate worries

(Reuters) - The BOJ is increasingly expected to lift rates to a 12-year
high of 0.75 percent from the current 0.50 percent level in the
coming months.




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JGBs edge up,rate worry weighs on short-term bonds

(Reuters) - Industrial production fell 0.1 percent in April from a month
earlier, against a forecast 0.5 percent rise, but traders said
the data failed to reverse mounting expectations for the BOJ to
raise rates as soon August.




"The weak April data alone does not alter the view that the
economy is growing in line with the Bank of Japan's basic
scenario," said Makoto Yamashita, chief JGB strategist at Lehman
Brothers.


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