Lead December JGB futures open higher Friday following Thursday's gains in U.S. Treasurys after the U.S. Fed announced QE3; the contract is currently up 0.26 at 143.86. Mitsubishi UFJ Morgan Stanley Securities senior fixed-income strategist Naomi Muguruma says after a strong start, buying and selling are likely to be mixed. She says the key effect of the Fed's easing on the Japanese market will be the currency market, as the yen appreciated after the Fed announcement. "As exports and production are still on a downward swing, a strong yen will put pressure on the Bank of Japan for more easing at their policy meeting next week," she says. The benchmark 10-year yield is down 2 bp at 0.805%.
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