TOKYO, June 23: Japanese government bond futures are expected to be top-heavy with a downward bias following the Group of Seven (G7) summit in Denver, where comments on Japan's trade surplus were within expectations and served to boost the dollar back above 115 yen in early Asian trade.

Although bond traders said strong dollar gains against the yen would push JGBs lower, they added that bond moves were likely to be limited in Tokyo as operators turn their attention to an auction of 10-year bonds on Tuesday and the release of the Bank of Japan (BOJ)'s "tankan" business sentiment report on Wednesday.

"Certainly while the dollar's moves will have an impact, the fact that the bond market is facing two major events later this week means activity today is likely to be limited," one trust bank trader said.He added that even if the dollar should rise to the upper end of the 115-116 yen range, support for the key September JGB futures contract would likely hold near 123.60 on technical factors.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.