August 5, 2013 / 2:27 AM / 4 years ago

JGBs rise, tracking firmer U.S. Treasuries after U.S. jobs data

TOKYO, Aug 5 (Reuters) - Japanese government bond prices rose on Monday, with the 20-year yield hitting a five-week low, tracking firmer U.S. Treasuries as slower-than-expected U.S. jobs growth raised uncertainty over when the Federal Reserve will scale back its stimulus.

* The 10-year yield slipped 2.5 basis points to 0.780 percent after gaining 3 basis points last week, while the 10-year futures were up 0.37 point at 143.73 after trading as much as 143.78 to a two-week high.

* “The report was slightly weaker than expected but it was sort of on the expected level,” said a fixed-income fund manager at a Japanese asset management firm in Tokyo.

* “JGB buyers will not change their mind even though if the Fed changes its monetary policy. If the Fed hikes the interest rates, then it will have a big impact. But no one expects such a big change.”

* U.S. employers slowed their pace of hiring in July but the jobless rate fell, a pair of mixed signals that could make the Federal Reserve more cautious about drawing down its huge economic stimulus programme.

* The Bank of Japan offered to buy 700 billion yen ($7.1 billion) of JGBs with residual maturities of one to more than 10 years, as part of its aggressive monetary stimulus policies to revive the world’s third-largest economy.

* The Japanese central bank is expected to keep monetary policy on hold at a two-day meeting starting on Wednesday as its unprecedented quantitative easing and government stimulus gradually spread through the economy.

* The five-year yield dipped 1.5 basis points to 0.285 percent and came off a two-week high touched in the previous session.

* The 30-year yield was down 1.5 basis points at 1.805 percent, more than recovering last week’s 1 basis point rise, while the 20-year yield eased 1.5 basis points to 1.695 percent after hitting a five-week low of 1.690 percent.

* The Ministry of Finance is to sell 500 billion yen of 30-year bonds on Friday.

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