JGBs are likely to open little changed from Tuesday's closing levels, as investors stay on the fence, awaiting new developments in Japan and overseas. Investors' reticence partly reflects their belief that JGBs have gotten quite expensive, with the 10-year yield coming within a hair's breadth of a nine-year low of 0.720%. "The market needs more support to break this level," says Tokai Tokyo Securities chief strategist Kazuhiko Sano in a research note. Overnight strength in U.S. Treasurys is expected to lend some support to JGBs, but few see that as being enough to nudge the 10-year yield through the key support. Lead December futures are tipped in a 144.53-144.62 band vs 144.54 at Tuesday's close, while the 10-year yield is tipped in 0.725%-0.730% against 0.730% at last quoted close.
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