Japan’s producer prices fell for the first time since July as the yen’s gain makes imports cheaper, adding to deflationary pressure on the economy.
Japan’s worst economic contraction since early 2011 will raise rather than lower benchmark bond yields, primary dealers say, as politicians jostling for power increase fiscal spending in the world’s largest debtor.
Japanese bonds rose, completing their biggest rally in 11 months, on speculation the yen’s strength will prompt the central bank to expand debt purchases.
Japanese bonds rose, snapping the first back-to-back drop in two weeks, as stocks slid on concern Greece may need to tap emergency loans to avoid default.
Japan’s bond sales may increase at a slower pace next fiscal year, easing concern supply will outstrip demand, according to Tokai Tokyo Securities Co. and Mitsubishi UFJ Morgan Stanley Securities Co.
"The sales tax increase and the possible dissolving of the parliament can accelerate yen weakness and stock gains that will weigh on JGBs."
- Eiji Dohke on Nov 11, 2014