Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (21030)	2/23/1999 10:46:00 AM
From: MythMan	Read Replies (2) \| Respond to of 86076

the rest of the week? all that does is suck out one more week of premium my friend. Just think what would happen if AG said stocks were undervalued.

To: yard_man who wrote (21030)	2/23/1999 11:14:00 PM
From: John Pitera	Respond to of 86076

this is not a constructive development for our bond Market February 24, 1999 Rise in Yields of Japanese Bonds May Undermine Low-Rate Policy By BILL SPINDLE Staff Reporter of THE WALL STREET JOURNAL TOKYO-Japanese bond yields jumped sharply after five days of retreat, raising doubts about how long government attempts to hold down long-term interest rates will work. Poor investor demand for an issue of 10-year bonds by the Ministry of Finance on Tuesday sent market prices for bonds tumbling amid concern that investors remain wary of lending to the government. Bond yields, which fall when prices rise, had been declining since the Ministry of Finance announced a series of measures to ease the pressure on long-term rates last week. The yield on the benchmark 10-year bond rose to 1.875%, a gain of 0.14 percentage point from a day earlier. Investors were startled Tuesday when brokers aggressively sold bond futures after the government auction to hedge against losses on bonds they were stuck holding when they couldn't find buyers. While holding bonds after auction isn't unusual for brokers, traders said the difficulty of placing the bonds reminded many investors that efforts to suppress long-term interest rates may only work temporarily in the face of the government's massive issuance plans. The Finance Ministry already has announced plans to issue 31 trillion yen ($256 billion) in new bonds next year, and analysts predict the government may ultimately issue as much as 40 trillion yen. The additional funds will be needed to pay for spending programs some economists predict will be necessary to keep the economy moving later this year. "The risk is that we'll see more spending, and that spells more government bond issuance," said Cameron Umetsu, a fixed-income strategist with Warburg Dillon Read. To be sure, yields remain well below the 2.440% they hit several weeks ago, spurring a Bank of Japan rate cut and a flurry of Finance Ministry measures to bring them down. Yields that high could undermine an economic recovery by driving up corporate borrowing costs and creating huge trading losses in the bond portfolios of major banks, some economists and government officials worry. Still, the sharp jump in yields Tuesday fanned concerns the government measures will manage only temporarily to suppress long-term rates, whose daily movements are largely beyond the control of the government. For example, some investors worry that the Ministry of Finance's Trust Fund Bureau-which helped lower rates when it re-entered the bond market last week after pulling out a month earlier-will scale back its purchases after the end of Japan's corporate fiscal year in March. Until December, the bureau was purchasing about one-quarter of all government bonds issued annually.