TOKYO, July 15: The key September 10-year Japanese government bond futures contract was easier on Tuesday, in thin trade. In general, trade was very quiet as the market suffered from a dearth of fresh trading incentives, traders said. "Traders are taking a wait-and-see stance, although it's not really clear what exactly they are waiting for," a trader with a foreign brokerage house said.

There was some focus on June Tokyo department store sales data due at 2.30 P.M. (0530 GMT), traders said. The market expects sales to have fallen about five percent year-on-year.

If department store sales in June show a year-on-year increase, that could lead to a view that the negative effect of the consumption tax on the economy has dissipated, and trigger some selling of JGBs, a trader for a trust bank's securities unit said. The cash bond market was quiet, as most investors were content to remain on the sidelines, traders said.

Foreign investors, however, were detected buying corporate bonds issued by construction companies, whose yields have risen since general contractor Tokai Kogyo filed for court protection on July 4, a trader for another foreign brokerage house said.

The buyers of the construction companies' bonds were hedging their positions by buying out-of-the-money stock call options of the relevant construction company, the trader said.

The September stood at 124.87 by midday, down from the previous day's close of 124.96. Turnover was a sparse 8,227 contracts.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.