YEN BOND FUTURES HIT RECORD HIGH IN EARLY TRADE
Yen bond futures prices hit record highs
in early trade in response to the early jump in the cash bond
market on speculative purchases by brokers, dealers said.
    Key June was 111.31 after hitting a record high earlier of
111.48, against an opening of 111.02. It closed at 110.68
yesterday. September was 110.10, below the earlier record of
110.15 and against a 109.40 close.
    The rally was triggered by a fall in short-term interest
rates and heavy broker speculation in expectation of more
end-investor purchases. But prices eased towards end-morning as
the cash bond market fell on profit taking, dealers said.
    The yen unconditional call rate was 3.5000 pct today, down
from 3.6250 pct yesterday.
    The Bank of Japan sold a total of 800 billion yen worth of
financial bills from its holdings to help absorb a projected
money market surplus of 1,300 billion yen due to allocation of
government revenues to local governments and public entities
and the return of bank notes.
    Dealers were divided about whether expectations of another
discount rate cut have been built into the market. Some dealers
said it is too early for the market to discount a rate cut and
projected a possible sudden market retreat.
 REUTER
