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Bonds on tiptoes
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August 4, 1999: 9:22 a.m. ET
Trading is subdued as investors wait for refunding announcement
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NEW YORK (CNNfn) - The U.S. bond market charted a reactive but technically upward course Wednesday morning, as few traders cared to step in from the sidelines while a weak dollar and an upcoming refunding announcement loomed.
Shortly before 9 a.m. ET, the bellwether 30-year Treasury bond edged up ¼ of a point in price to 87-28/32. The yield, which moves in the opposite direction, slipped to 6.14 percent from Tuesday's closing level of 6.16 percent.
Volume was sluggish, with many key market participants opting to watch and wait ahead of the Treasury Department's release of details of the third-quarter refunding, or debt auction, due later in the day.
Recent refundings have left the bond market struggling to absorb the additional supply created, with weak investor interest leaving institutional dealers saddled with the bulk of the fresh paper.
However, some traders expressed hopes the Treasury would announce a buyback of existing bonds and notes, effectively retiring some portion of its debt and curbing supply. This, in turn, would help encourage demand for the paper remaining on the market.
Other than factory orders due at 10 a.m. ET, little in the way of economic data was set for release. The bond market is braced to see the June factory orders number, released by the Commerce Department, slow to 0.4 percent growth from May's 1.1 percent figure.
In currency markets, the dollar went back on the defensive after a hoped-for joint intervention from the Bank of Japan and Federal Reserve failed to materialize.
In early trading, the greenback slid to 114.65 yen from its previous close of 115.32, giving back most of the gains won Tuesday after Japanese Finance Minister Kiichi Miyazawa said he and U.S. Treasury Secretary Lawrence Summers were carefully watching exchange rates.
At first, Miyazawa's remarks led currency traders to speculate that the two monetary officials were setting the stage for another round of dollar-buying aimed at keeping the yen under control. However, later remarks from Treasury slowed this train of thought by refusing to comment on the possibility of intervention.
Japanese monetary authorities have repeatedly insisted on a weaker yen, as yen strength robs the nation's vital export sector of revenue and, in turn, endangers a nascent recovery from economic recession. To combat the yen, the Bank of Japan (BOJ) and other central banks acting on its behalf has bought an estimated $37 billion in dollars and euros over the past seven weeks.
The euro, meanwhile, surged to a 10-week high against the dollar as European investors cashed out of U.S. stocks and bonds to pour money back into securities denominated in their own united currency. 
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