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JGBs firmer but rudderless, views mixed on economy

TOKYO: March 10-year Japanese government bond futures ended slightly higher on Wednesday, shrugging off a recovery in banking sector shares which helped the Tokyo stock market reclaim some of its recent losses.

JGBs were supported by views that Japan's zero interest-rate policy will be maintained for the time being following the recent bankruptcies of housing devKakuei Corp and supermarket operator Nagasakiya Co Ltd, traders said.

"The bankruptcies have raised concerns about the short-term prospects for a recovery in the Japanese economy," a trust bank dealer said.

There are concerns that more bankruptcies may take place amid an ongoing reorganisation in Japan's financial sector.

"More bankruptcies may occur as several Japanese banks hurry to settle their problem loans before merging with one another," the trust bank dealer said.

Such wariness about the short-term economic outlook kept JGBs well supported despite a rise in Tokyo share prices, which was fuelled by a rise in banking sector shares. March 10-year JGB futures: ended at 132.59, up 0.08 from on Tuesday's close.

The yield on the 220th 10-year JGB stood at 1.790 percent against 1.80 percent late on Tuesday.-Reuters