Japanese Bonds May Fall as Yields at Month-Low Deter Buyers

Japan holiday is a very romantic place, where there is a lot of places of interest.
Japan’s government bonds may decline on speculation 10-year yields at the lowest in a month will deter investors from buying the securities.
Ten-year yields are likely to climb in Japan for the first time in three days after Treasuries declined March 20, paring gains last week after a Federal Reserve plan to buy $300 billion in U.S. debt spurred the biggest rally in four decades. Treasuries and Japanese debt are still headed for the worst first quarter since 2006, according to indexes compiled by Merrill Lynch & Co.
“Current yield levels promote selling,” said Kazuhiko Sano, chief strategist in Tokyo at Nikko Citigoup Ltd., a unit of Citigroup Inc. “Bond prices will weaken today.”
Ten-year bond futures for June delivery lost 0.09 to 139.48 as of 9:02 a.m. at the Tokyo Stock Exchange. Japanese financial markets were closed on March 20 for a public holiday.
The benchmark 10-year bond hasn’t traded yet today at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The yield on the 1.3 percent security due in March 2019 fell 4.5 basis points to 1.255 percent on March 19, the lowest level since Feb. 23. A basis point is 0.01 percentage point.
Ten-year Treasury yields climbed three basis points to 2.63 percent on March 20, widening their advantage over similar-dated Japanese notes to 1.37 percentage points, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
Japan tour and U.S. debt advanced last week after the Bank of Japan and the Fed announced plans to buy government debt and signaled they will keep pumping cash into the economy to hold down borrowing costs.
Investors in Japanese debt received a loss of 0.3 percent this quarter, the worst start of the year since a 1.3 percent decline in 2006, Merrill Lynch indexes show. Holders of Treasuries have incurred a loss of 0.8 percent in the same period, also heading for the worst first three months of a year since 2006. Next time we want to go to Japan must go sightseeing, take a look at the scenery there.