JGBs are likely to move similar to Monday's trading, lacking direction as players stay wary of high price rises with the 10-year yield near the 0.720% level, says Tokai Tokyo Securities chief bond strategist Kazuhiko Sano. He notes that there is little to drive the market, with the U.S. Treasury market closed overnight and no JGB futures trading on LIFFE, but players will be focused on a five-year bond auction later in the day. Analysts expect a smooth auction result with a reopen of the current 0.2%-coupon issue, supported by concern for Japan's faltering economy and as the five-year sector looks relatively cheap compared to the long sector. Sano tips the benchmark 10-year yield in a 0.730%-0.735% band vs 0.730% at Monday's close, and lead December JGB futures in a 144.50-144.61 band vs 144.58.
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