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DJ JGBs Little-Changed Amid Lack of Cues
December 24, 2013

At 0600 GMT Change TFX Sep 3-Month Euroyen Price: 99.790 flat TSE Mar 10-Year JGB Futures Price: 143.98 +0.09 10-Year 0.6% JGB No. 332 Yield: 0.680% flat By Yumi Otagaki TOKYO--Prices of Japanese government bonds were little-changed Tuesday amid a lack of cues ahead of the year-end holiday break. The benchmark 10-year JGB yield was unchanged at 0.680% as at 0600 GMT while the lead March JGB futures were up 0.09 at 143.98. Traders said the government's announcement of its bond issuance plan for the next fiscal year had little impact on the market. Although budget-financing issuance is due to fall to Y41.3 trillion ($395.8 billion) in the next fiscal year, total Japanese government bond issuance is expected to surge to a record Y181.5 trillion in the year ending in March 2015, as borrowing to finance maturing debt will increase from the previous year. The government said it plans to sell Y155.1 trillion of JGBs to the market through regular auctions in the next fiscal year, trimming Y1.5 trillion from the current year and marking the first decline in market issuance in six years. Meanwhile, the government plans to increase the amount of 30-year JGBs sold by Y1.2 trillion, while decreasing the amount of two-year JGBs issued by a total of Y2.4 trillion. "Risks to the JGB market is an increase of bond issuance beyond market consensus. As the announced figures were in line with market expectations, the announcement offered reassurance to the market," said Akito Fukunaga, chief rates strategist at RBS Securities Japan. The government also said it will more than double issuance of inflation-linked bonds in the coming fiscal year. The Government Pension Investment Fund announced last week it would buy several hundred billion yen of inflation-linked JGBs in the year from April. "Other pension funds will likely follow suit and foreign investors will likely continue to buy inflation-linked bonds," Mr. Fukunaga said. Now investors are eyeing the final auction of the calendar year, a two-year bond auction scheduled for Wednesday. The Ministry of Finance is expected to offer Y2.9 trillion of two-year bonds with a 0.1% coupon, the same as the previous issue. Other Cash Bond Yields At 0600 GMT Change 2-Year 0.1% JGB No. 335 Yield: no trade 5-Year 0.2% JGB No. 115 Yield: 0.210% flat 20-Year 1.7% JGB No. 146 Yield: 1.535% flat 30-Year 1.7% JGB No. 41 Yield: 1.685% +0.005 Write to Yumi Otagaki at yumi.otagaki@wsj.com