-Caveat Lector- Japanese Bonds Seen Falling on Weak Demand for 10-Year Sale Bloomberg News Apr 17 1999 8:21PM ET (Changes dateline, updates day references throughout.) Tokyo, April 18 (Bloomberg) -- Japanese government bonds are likely to fall this week as a sale of 10-year bonds may fail to lure investors amid concern the government will have to increase spending to revive the economy. The Ministry of Finance will sell 1.4 trillion yen ($11.8 billion) in 10-year bonds, which could provide a 1.5 percent or 1.6 percent coupon at Wednesday's monthly auction, the lowest since November. ``The big question is whether investors will buy such a coupon,'' said Akinori Ito, chief portfolio manager at Nikko International Capital Management Co., which oversees 2.5 trillion yen ($21.1 billion) in assets. ``We won't.'' In the week just ended, the benchmark No. 211, 10-year bond rose 0.044, or 22 yen per 50,000 yen bond, pushing the yield down 0.5 basis point to 1.605 percent. Bond futures for June delivery rose 0.30 to 133.80. Low coupons are less attractive to Japanese bond investors because under the nation's accounting standards, coupon payments are classified as riskless investment and not subject to capital gains tax. Many traders said that a coupon under 1.70 percent will not be attractive. Additional Spending Investors expect that the government will have to spend more in the latter half of this year to revive the world's second-largest economy, which the government has said contracted 2.2 percent for the year ended March 31. That has raised concern the government may have to sell more debt than already planned. It plans to sell a record 71.3 trillion yen in bonds in the year started April 1, a 23 percent increase from the previous year. The prospect of such debt sales helped to push up the yield on the 10-year bond to its high of 2.505 percent on Feb. 3. The yield fell after the Bank of Japan on Feb. 12 cut its target rate for overnight lending between banks. Finance Minister Kiichi Miyazawa said last Friday there is a need to consider tax cuts to promote investment and effective use of assets. ``We didn't expect the tax cut talk,'' said Koji Hozumi, a trader at New Japan Securities Co. ``That could help stocks'' and lead to more debt sales, he said. Search Financial News Enter ticker symbol or keyword: Sponsored trading links: Advanced Search Search Tips Search all of Snap Search only in Business & Money Home | Search | Help | About Snap | Ad Info | Snap Jobs Copyright � 1997-1999 Snap and its content providers. All rights reserved. Bloomberg L.P. and its suppliers believe the information herein was obtained from reliable sources but they do not guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation of the purchase or sale of securities or commodities. DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance�not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://home.ease.lsoft.com/archives/CTRL.html http:[EMAIL PROTECTED]/ ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
