Japanese government bonds were steady on Monday, as investors awaited the outcomes of this week’s U.S. and Japanese central bank meetings at which policymakers were expected to maintain policy.
The 10-year cash JGB yield was flat on the day at 0.065 percent, while the 10-year JGB futures contract finished up 0.04 point at 150.44.
At its two-day meeting through Tuesday, the Bank of Japan is set to keep intact a pledge to guide short-term interest rates at minus 0.1 percent and the 10-year government bond yield around zero percent.
Underpinning the bond market, the Nikkei business paper reported on Saturday that BOJ Governor Haruhiko Kuroda is the leading candidate for a second five-year term when his current one ends in April. That would likely mean a continuation of the bank’s ultra-easy monetary policy.
The market largely shrugged off data released earlier in the day that suggested Japan’s economic recovery was gaining momentum. Retail sales rose last month at their fastest pace in three months.
The U.S. Federal Reserve will hold a two-day policy meeting on Tuesday and Wednesday, at which it is expected to leave rates unchanged. Most market participants expect the U.S. central bank to resume hiking rates in December.
Investors also focused on the BOJ’s bond buying plans for November, which will be revealed on Tuesday.
On Monday, the BOJ offered to buy 70 billion yen ($615.98 million) of JGBs maturing in up to one year, 280 billion yen of JGBs maturing in one to three years, and 300 billion yen of three- to five-year JGBs. The amounts were unchanged from the previous purchases in those zones. ($1 = 113.6400 yen)