Bonds gain on Japanese data, rand falls

YIELDS on bonds edged firmer while the rand softened against the dollar yesterday as investors held off ahead of an interest rate decision by the central bank today.

Local bonds continued to gain from demand for higheryielding emerging market assets after Japan’s surprise slip into recession, with the yield on the benchmark paper due in 2026 falling.

At 5pm yesterday, the rand was bid at R11.0668 to the dollar, 6.57c softer than at the same time on Tuesday, reversing gains that saw it reach a twoweek low against the greenback in the previous session.

But both the currency and local bonds were little moved by consumer inflation data published earlier in the session, with headline inflation at 5.9 percent year on year in last month, unchanged from September and in line with market expectations.

Analysts said the focus would be on the detail con- tained in the central bank’s policy statement when it announces its final interest rate decision for the year – the first under new governor Lesetja Kganyago.

“We’ve been in a wary market for the last couple of days. Most people are reluctant to get involved at the moment be- cause of the MPC [monetary policy committee] tomorrow [today],” said Dale Forssman, a bond trader at World Wide Capital Securities.