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JGB s futures show

upward movement

TOKYO: Japanese government bond (JGB) and futures prices were higher in late Tokyo trade, as selling momentum languished due to stability in the yen and Tokyo stocks, and short-covering led the market, dealers said.

"Buying back related to dealers shifting positions to the next key contract was the main activity in the futures market today, although the trading was somewhat directionless," said a securities house dealer.

The September futures contract closed 0.20 higher at 116.90. Its turnover of 26,510 contracts was exceeded by that of the December contract for the first time today.

The December's turnover marked 40,485 contracts.

Market participants consider that December has now become the new key contract, but the benchmark status will officially shift to December when its turnover surpasses that of the previous contract's for two consecutive days.

September futures rose as high as 117.20, buoyed by dealers' short-covering, but their profit-taking emerged in the afternoon, hitting the futures briefly down to 116.68.

The December contract ended the day at 116.00, up 0.44 from its Wednesday close. It moved in a range of 115.55 to 116.18.

In the cash bond market, investors maintained a cautious stance in the long-term zone.

But a variety of investors purchased short- and medium-term maturities sporadically, after prices in those zones declined sharply on Wednesday, traders said.

"Investors were cautious in the long-term, but if prices in the shorter-term are hurt again, the selling might spill over to long bonds," said another securities house trader.

The benchmark 174th 10-year bond yielded 3.245 percent at 0746 GMT, compared with Wednesday's 3.270 percent close.-Reuter