TOKYO, Aug 19 (Reuters) - Japanese government bonds were little changed on Thursday as a wait-and-see mood prevailed with prospects of further monetary easing by the Bank of Japan mostly priced in after an extensive rally that has taken yields to seven-year lows.
* The bond market showed limited reaction to a Sankei newspaper report that the BOJ has started considering additional easing steps.
* The market expects the central bank either to expand the size of its fund supply operation first introduced in December or to extend the duration to six months from three months.
* Increasing the amount of JGBs the BOJ buys from the market is another easing option but one that market players say the central bank is likely to save for more dire circumstances.
* Speculation has heightened that the BOJ may ease monetary policy further ahead of an expected meeting between Prime Minister Naoto Kan and BOJ Governor Masaaki Shirakawa next week, with the yen hovering just above a 15-year high against the dollar and threatening to hurt Japan's economy and fan deflation.
* September 10-year JGB futures rose 0.03 point to 142.91. The contract reached a fresh seven-year high of 143.05 during evening trading on Wednesday.
* The benchmark 10-year yield was flat at 0.915 percent after hitting a new seven-year trough of 0.900 percent on Wednesday.
* The five-year yield was flat at 0.260 percent, matching a seven-year low hit on Wednesday.
(Reporting by Shinichi Saoshiro; Editing by Edmund Klamann)
((shinichi.saoshiro@thomsonreuters.com; Reuters Messaging: shinichi.saoshiro.reuters.com@reuters.net; +81-3-6441-1774)) Keywords: MARKETS JAPAN JGB (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
* The bond market showed limited reaction to a Sankei newspaper report that the BOJ has started considering additional easing steps.
* The market expects the central bank either to expand the size of its fund supply operation first introduced in December or to extend the duration to six months from three months.
* Increasing the amount of JGBs the BOJ buys from the market is another easing option but one that market players say the central bank is likely to save for more dire circumstances.
* Speculation has heightened that the BOJ may ease monetary policy further ahead of an expected meeting between Prime Minister Naoto Kan and BOJ Governor Masaaki Shirakawa next week, with the yen hovering just above a 15-year high against the dollar and threatening to hurt Japan's economy and fan deflation.
* September 10-year JGB futures rose 0.03 point to 142.91. The contract reached a fresh seven-year high of 143.05 during evening trading on Wednesday.
* The benchmark 10-year yield was flat at 0.915 percent after hitting a new seven-year trough of 0.900 percent on Wednesday.
* The five-year yield was flat at 0.260 percent, matching a seven-year low hit on Wednesday.
(Reporting by Shinichi Saoshiro; Editing by Edmund Klamann)
((shinichi.saoshiro@thomsonreuters.com; Reuters Messaging: shinichi.saoshiro.reuters.com@reuters.net; +81-3-6441-1774)) Keywords: MARKETS JAPAN JGB (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.