SINGAPORE, Aug 12: SIMEX Euroyen and Japanese government bond (JGB) futures lost ground on Tuesday as Nikkei cash and futures markets clambered to a firm finish. But dealers said the outlook for the Nikkei remained grim amid signs of continued economic weakness in Japan, which would in turn keep Euroyen and JGB futures well underpinned.

"There was just some short-covering on the Nikkei but on the whole, sentiment is still bad. So we're looking for a firmer Euroyen market," a dealer at a European futures house said.

The 225-share Nikkei average ended up 274.93 points to 19,099.11 in Tokyo while its September futures contract added 270 points to 19,120 on SIMEX. Dealers said the Japanese interest rate market might be in for a period of consolidation after recent sharp gains but it would continue to take its cue from the Nikkei in the absence of fresh factors.

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