JGB futures hit six-week high tracking Treasuries

(Reuters) - September 10-year futures rose as much as 0.29 point to
132.37 , the highest since early June.




Traders said expectations remained for the Bank of Japan to
raise interest rates to a 12-year high of 0.75 percent from the
current 0.5 percent as early as next month, limiting gains in
JGBs.


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Yen May Extend Declines Versus Dollar, Euro Before Announcement on Rates

(Bloomberg) -- The yen may fall versus the dollar
and euro for a second day as the Bank of Japan is expected to
keep its benchmark interest rate at 0.5 percent, the lowest
among major economies.

Traders may continue to borrow in yen to fund so-called
carry trade investments in higher-yielding assets. Japan's
consumers were the most pessimistic in more than two years last
month, a Cabinet Office report showed yesterday.


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Seoul's main index hits record

(Reuters) - Japanese shares -- notably machinery stocks like Fanuc Ltd. -- were boosted by stronger-than-expected May machinery orders data on Monday.




The robust figures cemented expectations that the Bank of Japan will raise interest rates as early as August, depressing the Japanese government bond market.


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JGB futures hit 3-wk high as tankan meets forecast

(Reuters) - "The headline figures are as expected, but there are a few
worrying points, such as current as well as future weakness in
smaller firms, and a drop in the sentiment index for the raw
materials sector," said Mari Iwashita, a fixed-income strategist
at Daiwa Securities SMBC.




The quarterly tankan survey also showed companies were still
refraining from raising prices despite rising costs, while a flat
business outlook for big companies suggested their activities are
on a plateau now, Iwashita said.
"The survey does not, however, affect the general scenario of
the economy or expectations for a Bank of Japan rate hike," she
said.


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Japan Machinery Stocks May Drop on Tankan Spending Plans,Led by Komatsu

(Bloomberg) -- Shares of Japanese machinery makers
such as Komatsu Ltd. may fall after capital spending plans in
the Bank of Japan's quarterly Tankan survey missed economists'
forecasts.

Companies plan to boost capital spending by 7.7 percent in
the coming year, lower than a forecast for a 9 percent increase
according to the business confidence survey published 10 minutes
before the start of trading.


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Yen Falls, Heading for Biggest Quarterly Loss Since 2001 Versus the Dollar

(Bloomberg) -- The yen headed for its biggest
quarterly loss against the dollar since 2001 as a drop in
consumer prices reinforced speculation the Bank of Japan will
keep interest rates on hold.

Japan's currency has declined 4.3 percent this quarter
versus the dollar as investors borrowed yen to buy higher-
yielding assets in carry trades. A report showed today Japanese
consumer prices fell 0.1 percent last month. The central bank has
kept its key rate at 0.5 percent, the lowest amongst major
economies, since February.


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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.


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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.


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Yen Slides Against Dollar, Euro as Fukui Signals Rates Won't Rise Quickly

(Bloomberg) -- The yen slumped the most against the
dollar since January as Bank of Japan Governor Toshihiko Fukui
said the central bank needed to be ``more confident'' about
price increases before raising rates.

Japan's currency reached an all-time low against the euro
as the yield advantage of 10-year German bunds and comparable
Japanese notes expanded to the widest in three years. Treasury
yields pulled back from five-year highs reached this week as a
government report showed core consumer inflation abated.


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GLOBAL MARKETS-Stocks, bond yields rise; yen weak after BOJ

(Reuters) - LONDON, June 15 - Global stocks rose on Friday,
absorbing further gains in U.S. and euro zone government bond
yields ahead of U.S. inflation data, while the yen sank after
the Bank of Japan left interest rates on hold.




Energy stocks outperformed after oil spiked above $71 a
barrel overnight and merger and acquisition speculation buoyed
British retailers after a Qatari investment fund increased its
stake in J. Sainsbury , sending its shares up 5 percent.


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