Japan 30-Yr JGBs Meet Firm Demand But Bond Futures Unaffected

     TOKYO (MNI) - The supply of the new 30-year Japanese government bonds

auctioned Tuesday met firm demand, but September 10-year bond futures were

unaffected by the auction results.

     The Ministry of Finance sold Y647.2 billion of the 30-year bonds, with the

lowest accepted price of 98.10, matching expectations of market players.

     The tail stemming from the gap between the average and accepted lowest

prices widened to 0.10 from 0.09 at the previous auction in July. A smaller

number means that investor demand is stronger.

     Immediately after the results, September 10-year bond futures traded at

150.23, up from 150.22 seen before the results.

     At midday, September bond futures ended down 0.02 from Monday's close at

150.22.

     The new issue carries a coupon of 0.8%, unchanged from that for the current

30-year bonds.

     Bids totaled Y2.5245 trillion, making the bid-to-cover ratio 3.90, up from

3.62 at the previous similar auction in July.

     JGB investors who bought the new 30-year bonds at the auction are expected

to try to sell them at higher prices to the Bank of Japan on Wednesday, when it

is scheduled to conduct outright bond-buying operations.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

[TOPICS: M$A$$$,M$J$$$,M$$FI$,MN$FI$]