As the economy shows solid growth, Japanese bonds will stay one of the worst performing markets. |
Bonds are unlikely to rise as people in the market are aiming for the 1.6 percent coupon. |
But when you think about it, the Nikkei remains above 16,000 and, level-wise, the 1.4 percent region (for 10-year bonds) is too low, so we're not likely to see too much more buying from this point on. |
Considering the strong demand among people in the market, 10-year yield won't stay above 1.6 percent for a long time. Even if it reaches it, it won't probably hold for a long time. |
His intentions were not very clear but there is a sense of disappointment in the market, considering some people were thinking the recent spikes in the short to intermediate sector of the yield curve were overdone. |
I am expecting the five-year note sale will probably be a chance for bonds to rebound. The coupon is looking attractive and the auction will go smoothly. We can expect solid demand from bidders. |
If the central bank acts this week, it will probably come up with ways to limit rate increases to ease concerns of the government and investors. |
Investors may become cautious about buying bonds given the plunge in U.S. Treasuries and European bonds. Bonds will probably stay lower ahead of the series of the economic indicators. |
The five-year notes became cheaper against the 10-year bonds on the yield curve. |
There may be some selling as people want a higher coupon for the new debt. A 2.2 percent coupon may disappoint investors. |
Twenty-year bonds have risen too far given the auction tomorrow. Traders are likely to try and back up the yield to closer to 2 percent for the auction. |
Yields are high enough to attract some buyers. Yields are probably near their highs for the next two or three months and already reflect the outlook for a gradual economic recovery. |