Bonds Ignore Historic Drop in Weekly Jobless Claims

Bond prices were little changed on extremely light volume this morning, despite a drop in the weekly tally of initial jobless claims to its lowest level in 25 years and the latest rise in oil to near $25 a barrel.

The markets' single-minded focus on the value of the dollar against the yen, only slightly lower this morning as traders await the outcome of this weekend's G7 meeting in Washington, isn't hurting much today. The meeting may produce an accord to weaken the yen, whose rise is detrimental to Japanese exporters, through joint intervention in the currency markets.

The bond market "is focused on the dollar and equities, but more on the dollar," said David Ging, Treasury market strategist at Donaldson Lufkin & Jenrette. "So we're not likely to see much before G7, to see if anything comes out of the meeting to support the dollar." ...