Japanese government bonds end morning lower ahead of auction
Published October 2nd, 2007
Japanese government bond prices finished the Tuesday morning session broadly lower as healthy gains on the equity markets weakened investor appetite for fixed-income assets.
In late August and early September, risk-averse investors sought the safety of bonds due to credit worries triggered by the subprime lending problems in the US. Their buying sent the yield on the most popular 10-year government bond down to 1.5 percent on Sept 10.
But the interest rate cut by the Federal Reserve in mid-September and expectations of further cuts have gradually revived investor appetite for risk assets and made bonds less attractive.
The Institute for Supply Management said Monday the US manufacturing sector grew in September at its slowest pace in six months. The ISM’s index of manufacturing activity was at 52.0 in September, below forecasts of at least 52.5. This raised expectations that the Fed will make another rate cut at its October 30-31 meeting.
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