UPDATE 1-Japan business sentiment unchanged as expected

(Reuters) - The yen fell to a session low of 123.28 to the dollar
after the BOJ's quarterly tankan business sentiment survey came
largely in line with forecasts, compared with around 123.05 just
before it was released. Japanese government bond futures
hit a three-week high of 132.20, up 0.19 point.




The BOJ's closely watched tankan, meaning short-term economic
outlook, showed a headline diffusion index for big
manufacturers' sentiment of plus 23.


Read more at Reuters.com Economic News

Goldman's O'Neill Says BOJ Should Increase Rates Regardless of Inflation

(Bloomberg) -- The Bank of Japan should raise
interest rates gradually even if there is no sign of inflation,
said Jim O'Neill, head of global economic research at Goldman,
Sachs Group Inc.

Yields on benchmark 10-year Japanese bonds have climbed more
than a quarter-percentage point since May 17, when BOJ Governor
Toshihiko Fukui said the bank can raise rates even if consumer
prices are falling, as long as it's confident about the outlook
for the economy. A report last week showed growth expanded more
than the government's initial estimate in the first quarter.


Read more at Bloomberg Bonds News

Yen hits record low vs euro as carry continues

(Reuters) - The yen has fallen across the board since the Bank of Japan last week kept interest rates on hold at 0.5 percent and Governor Toshihiko Fukui said he had no preconceived ideas about a future rate rise, dousing expectations of a hike in July.




Most market players are looking for the BOJ to raise rates to a 12-year high of 0.75 percent in August, but such a move is not expected to dull the allure of carry trades -- borrowing cheaply in low-yielding units to buy higher-yielding currencies.


Read more at Reuters.com Hot Stocks News

JGB futures climb on Fukui, Treasury gains boost

(Reuters) - A rally in U.S. Treasuries on Friday also encouraged market
players to cover short positions in JGBs, which had been sold off
in the previous four weeks on a spike in global bond yields, as
well as on worries of a BOJ rate hike as early as July.




Fukui said the central bank wanted to be more convinced of
the sustainability of capital spending and consumption before
changing monetary policy, relieving some who had been worried
about an interest rate hike next month.


Read more at Reuters.com Bonds News