Bond prices are expected to fall on the 10th. Selling is likely to occur in the US market as long-term interest rates rose in response to the employment statistics announced on the 6th. The fact that the five-year government bond auction is scheduled for the 11th and expectations that the Bank of Japan will make early policy revisions are also likely to weigh on the market.
Tsutomu Okumura, senior interest rate strategist at SMBC Nikko Securities, said the current situation is that interest rates have fallen significantly in the European market and that high-ranking officials at the U.S. Federal Reserve have sent a message that rising U.S. bond yields are an alternative to raising interest rates. We believe that the bond market, although weak, remains solid. In the lead-up to the five-year government bond auction, he says, “Futures and the five-year zone are likely to include corrections.”
The expected yield range for newly issued 10-year government bonds is 0.79 to 0.82% (0.8% on the 6th), and the December futures contract is 144.55 yen to 144.85 yen (144.77 yen on the 6th).
On the 6th, US long-term interest rates temporarily hit 4.885%, the highest level in 16 years. Spot U.S. Treasury bond trading will be closed on the 9th for Columbus Day. Trading will resume on the 10th.
September U.S. employment growth significantly exceeds expectations – arguments for further interest rate hikes strengthen
Hamas, the Islamic organization that effectively controls the Palestinian autonomous region of Gaza, launched an attack on Israel on the 7th. There is a growing expectation that this will have a negative impact on the production and exports of oil-producing countries in the Middle East, such as Iran, and that the supply and demand for crude oil will become even tighter. The impact on interest rates is unclear at this stage.
In nighttime futures trading, the December contract ended at 144.70 yen, down 7 sen from the daytime closing price on the 6th.
Bank of Japan operation
Regular purchases of government bonds are subject to remaining maturities of more than 1 year and less than 3 years, more than 5 years and less than 10 years, more than 10 years and less than 25 years, and more than 25 years.The previous purchase amounts were 425 billion yen, 675 billion yen, 200 billion yen, and 100 billion yen, respectively. Limit price operations to purchase unlimited 10-year government bonds at a yield of 1% were carried out every business day. They are eligible for delivery and are used to settle bond futures. The same operation targeting the cheapest stocks (cheapest) will continue.
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2023-10-09 22:48:00
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