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Wednesday, 21st July 2010
In Business In Japan,

20-year bonds fall in Japan

The value of 20-year bonds in Japan have fallen for the third day in a row.

The falls come just before the Ministry of Finance in the country is due to auction off 1.1 trillion yen worth of the securities and the drops in value could impact sales.

Speaking to Bloomberg, senior economist at Tokyo firm Okasan Securities Akitsugu Bandou said he "had doubts" whether bonds with coupons as low as the 1.8 per cent likely to be offered with the sale would sell.

Bloomberg noted that primary dealers often try and lower holdings of bonds prior to auctions to protect against further declines in price before they can once again pass on the securities.

However, ten-year bonds in the country rose and ten-year bonds for September delivery rose to 141.65 on the Tokyo Stock Exchange, reported the source.

Stocks in Japan are heavily impacted by the state of the US economy and a strong yen can also spell bad news for the value of Japanese firms.

Written by Kimberley Homer.