Lead December JGB futures start lower, but strategists say the market is likely to lack direction amid high prices and few trading clues. The contract is currently down 0.06 at 144.52. The market is focused on an auction of five-year JGBs, the result of which is due at 0345 GMT. Keiko Onogi, senior JGB strategist at Daiwa Securities, says the auction should go smoothly with the sector looking relatively cheap on the curve and supported by expectations for continued Bank of Japan monetary easing. "The impact on the direction of the secondary market and the yield curve after the auction should be limited," she says, tipping the five-year yield in a 0.180%-0.200% band until the next auction on Dec. 13. 10-year cash bonds have yet to change hands.
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