JGBs climb, investors buy debt as stocks slide

TOKYO, March 2 | Tue Mar 1, 2011 9:22pm EST

TOKYO, March 2 (Reuters) - Japanese government bonds climbed
on Wednesday, with futures seen snapping a three-day losing
streak, as Tokyo shares dropped on concerns that rising oil
prices will hurt global economic recovery.

* March 10-year futures 2JGBv1 were up 0.29 point at
139.64, after diminishing slightly below a 25-day moving average for
the first time in nearly a week on Tuesday.

* The benchmark 10-year yield JP10YTN=JBTC was down 2.5
basis points at 1.280 percent, pulling away from a 10-month high
of 1.350 percent struck last month.

* The 20-year yield JP20YTN=JBTC was 1.5 basis points lower
at 2.020 percent.

* The five-year yield JP5YTN=JBTC dropped 3 basis points to
0.520 percent, while the two-year yield JP2YTN=JBTC was 0.5
basis point lower at 0.235 percent.

* The five-year/10-year yield spread widened to around 76
basis points, the widest since mid-December as domestic investors
were seen buying standard-term bonds.

* "Markets are factoring in a negative impact from rising oil
prices on economic growth. A sustained rise in yields is unlikely
unless we see a huge change in that trend," said Chotaro Morita,
head of fixed income strategy research at Barclays Capital
Securities in Japan.

* Analysts said moves could be limited ahead of U.S. Jobs
data on Friday.

* U.S. Treasuries were higher on Tuesday after stock market
losses fuelled safety bids. Benchmark 10-year notes US10YT=RR
turned flat, having erased earlier losses on the day. [US/]

* The Nikkei fell 1.7 percent on rising oil prices. [.T] (Reporting
by Akiko Takeda; Editing by Joseph Radford)

Source: Reuters.Com