Aust bonds weighed down by yen

Australian bond futures are weaker after renewed selling of the Japanese yen boosted equity markets and reduced demand for safe-haven assets.

JP Morgan interest rate strategist Sally Auld said domestic bond futures prices fell during Monday's local session as major currencies, including the US dollar rallied against the yen.

Ms Auld said foreign exchange markets continued to push the yen lower after Japan avoided a censure from a meeting G20 finance ministers over expansionary policies that have seen its currency fall sharply in recent months.

"I think the market took that as a bit of a green light to keep selling the yen," Ms Auld said.

"That has helped boost equity markets and has pushed bonds down."

Ms Auld said local bond futures were unlikely to move significantly over the next week.

That is despite the release on Tuesday of the minutes of the Reserve Bank of Australia's February board meeting, and RBA Governor Glenn Stevens' six-monthly appearance before a federal parliamentary economics committee on Friday.

"I can't see us breaking out of the range either way," Ms Auld said.

At 1630 AEDT on Monday, the March 10-year bond futures contract was trading at 96.465 (implying a yield of 3.535 per cent), down from 96.500 (3.500 per cent) on Friday.

The March three-year bond futures contract was at 97.100 (2.900 per cent), down from 97.140 (2.860 per cent).

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9327-0.0005-0.05%
    AUDUSD=X
    0.5555-0.0003-0.05%
    AUDGBP=X
    0.6753-0.0003-0.05%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg