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JGBs pushed down by Nikkei's rise, yen's weakness

TOKYO: Japanese government bond futures: ended Tokyo trading moderately lower, pressured by strength in Tokyo share prices and the yen's weakness. But key 10-year June JGB futures were expected to find technical support at 130.50. Cash JGBs were also weaker, although active follow-through sales were limited as many investors refrained from trading heavily ahead of the fiscal year-end on March 31. JGB market sentiment was turning bearish, but there were no fresh incentives to push prices sharply lower.

The benchmark Nikkei stock index closed 239.42 points or 1.21 percent higher at 19,959.52. June JGB futures closed at 130.81, down 0.29 point from Monday's close in Tokyo.

The yield on 219th 10-year cash JGB stood at 1.835 percent, up 0.015 percentage point from Monday's close.June futures had opened slightly higher, reflecting weaker-than-expected industrial production data for January and weak household spending data.

Spending by Japanese wage earners' households fell a real 3.0 percent in January from a year earlier, the sixth consecutive monthly decline, the government said on Tuesday.

Industrial production rose a preliminary 0.9 percent from the previous month on a seasonally adjusted basis. That was below a consensus forecast in a Reuters survey of a 3.0 percent gain.

But the market quickly shifted its focus to the upbeat mood of the Tokyo stock market. The benchmark Nikkei stock average closed 239.42 points or 1.21 percent higher at 19,959.52.

In the money market, the key unsecured overnight call rate dropped to 0.02 percent by late trade due to fading concerns over leap year computer-related problems.

Some money market rates had risen on Monday as foreign banks raced to boost short-term liquidity to guard against possible computer-related problems on February 29. The weighted average of the overnight rate was at 0.28 percent on Monday.

To stem the rise in the overnight rate, the BOJ injected 500 billion yen worth of Treasury bills to boost the projected net surplus to 11.4 trillion yen at its regular operation, compared with 9.8 trillion yen on Monday.

Elsewhere, September TIBOR-based euroyen futures closed at 99.730, little changed from Monday's day-session settlement of 99.735.-Reuters