TOKYO, July 21: Japanese government bonds fell on Thursday, led by the superlong zone, as the Japanese government geared up to unveil another stimulus package. The 10-year JGB yield added half a basis point to minus 0.240 percent, while September 10-year futures edged up 0.02 point to 153.30 in afternoon trading. The 20-year JGB yield added 3 basis points to 0.175 percent, and the 30-year JGB yield rose 4 basis points to 0.245 percent. Japan is preparing a package of economic stimulus measures totalling $190 billion or more, though actual government spending is likely to be less than half that amount, sources involved in the process said on Thursday. The package will have a headline figure of at least 20 trillion yen, three sources told Reuters, marking the upper end of current market expectations. “My guess is that the amount is that high, but much of it will be used to pay various ‘consultants,'” said Hiroki Allen, chief representative of Superfund Japan in Tokyo. Expectations are also high among investors that the Bank of Japan will decided to take further stimulus action at its meeting next week, on July 28-29. However, some say the government’s massive spending package as well as the yen’s recent weakening have taken some pressure off the bank to ease further for now. On Thursday, the central bank offered to buy a total of 1.135 trillion yen in JGBs under its asset purchase programme, including 375 billion yen in the 1- to 3-year zone, 440 billion yen in the 3- to 5-year zone, 200 billion yen in the 10- to 25-year zone, and 120 billion yen of JGBs maturing in over 25 years. (AGENCIES)
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