TOKYO (Thomson Financial) - Japanese government bond prices closed mostly lower Thursday on position-adjustment after their rises yesterday, while investors waited for remarks the governor of the Bank of Japan was due to deliver after its policy board kept interest rates unchanged.
The Bank of Japan kept its overnight call rate target unchanged at 0.50 percent for the sixth straight meeting, as widely expected by the market.
Yuuki Sakurai, general manager at Fukoku Mutual Life Insurance, said: "After sharp declines in bond yields yesterday, investors adjusted their positions and the yield [on the benchmark 10-year government bond] is back to the 1.9 percent level."
Investors were waiting for Bank of Japan governor Toshihiko Fukui to give some hints about when interest rates will rise, but Sakurai said Fukui's remarks might not have much influence on the bond market.
"The bond market is expected to remain cautious, as uncertainty about the outlook for the sub-prime lending market persists in the US, and Japan's elections to the upper house are scheduled for later in July," he said.
The yield on the benchmark 10-year bond closed at 1.900 percent, up from 1.875 percent at the close Wednesday.
The yield on the two-year note was unchanged at 1.030 percent, while the yield on the lead five-year note inched up to 1.490 percent from 1.475 percent.
The yield on the bellwether 20-year bond was at 2.305 percent, up from 2.265 percent, and the yield on the 30-year bond climbed to 2.535 percent from 2.500 percent.
Bond prices move inversely to yields.
The price of the September futures contract for 10-year bonds closed at 131.87 yen, up 131.80 yen at the close Wednesday.
(1 US dollar = 121.90 yen)
kaori.kaneko@thomson.com
kk/jm
