TOKYO, Nov 4 (Reuters) - Japanese government bond 10-year futures edged lower on Wednesday as traders returned from a holiday, taking its cue from falls in U.S. Treasuries over the past couple of trading sessions.
* Treasuries have fallen this week, hurt by a stronger-than-expected reading in the Institute for Supply Management's factory index and as traders prepared for Wednesday's Treasury refunding announcement and a Federal Reserve policy decision.
* Market players said JGB futures were taking their cue from the decline in Treasuries.
* Lead December 10-year JGB futures dipped 0.15 point from their close on Monday to 138.12. The Tokyo JGB market was closed on Tuesday due to a Japanese national holiday.
* The benchmark 10-year JGB yield eased 0.5 basis point to 1.370 percent.
* JGBs have had some reprieve this month after they were sold off in October, when they retreated on worries about the size and details of debt issuance for the rest of this fiscal year and next.
* The benchmark 10-year JGB yield climbed 11 basis points in October, its biggest one-month rise since May 2008, and hit a 2-½ month high of 1.425 percent last Friday.
* The MOF said last week that it would increase its issuance of JGBs to the market for the fiscal year to March 2010 by 2.1 trillion yen ($23.23 billion) to 132.3 trillion yen, to offset weak demand for JGBs among retail investors.
* Investors are bracing for the possibility of further increases in debt issuance this fiscal year to offset an expected tax revenue shortfall, although some analysts reckon that the bulk of any extra issuance to the market may be concentrated in short-term JGBs.
* There is also uncertainty about the size and details of JGB issuance to the market next fiscal year, which starts in April.
($1=90.38 Yen)
(Reporting by Masayuki Kitano; Editing by Michael Watson) ((masayuki.kitano@thomsonreuters.com; Reuters Messaging: masayuki.kitano.reuters.com@reuters.net; +81-3-6441-1872)) Keywords: MARKETS JAPAN JGB
(If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
