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Japan’s inflation-linked bonds are poised for a second monthly fall as the stronger yen exacerbates deflationary pressure on an economy still reeling from the quake, tsunami and nuclear disasters.

Securities that reflect the outlook for consumer prices handed investors a 0.02 percent loss through Tuesday, an index compiled by Bank of America Merrill Lynch shows, set for the first two-month slide since November 2008 in the aftermath of Lehman Brothers Holdings Inc.’s collapse. By comparison, U.S. inflation-linked debt has increased 6.4 percent since the end of June, while Germany’s has risen 3.3 percent.

The yen has recovered all losses against the dollar since Japan sold its currency Aug. 4 for the third time in a year, reapproaching a postwar record set in March. A gauge of price trends known as the deflator fell in the second quarter by the most in more than a year, data showed this week, adding to evidence the stronger currency is deepening deflationary pressures that have gripped the country for more than a decade.

“I expect linkers to continue to slump,” said Takeshi Minami, chief economist in Tokyo at Norinchukin Research Institute Co., a unit of Norinchukin Bank, which has $920 billion in assets. “The yen’s appreciation counters rising prices on commodities and adds to downward pressure on the domestic economy by hurting exporters’ earnings, so it has negative influence over consumer prices.”

The economy shrank at a 1.3 percent annual pace in the three months through June, the third straight quarter of contraction, the Cabinet Office said Monday. The deflator dropped 2.2 percent in the period from a year earlier, more than the median estimate of economists for a 1.7 percent decrease.

Deflation boosts the value of fixed payments from debt. The so-called breakeven rate, or the difference between yields on five-year notes and inflation-linked debt, fell to negative 0.48 percentage point Aug. 9, the least since April 7, and was negative 0.44 percentage point Wednesday. That compared with a positive 1.71 percentage points in the U.S.

The statistics bureau will change the base year to 2010 from 2005 for the computation of consumer prices starting with July data due for release Aug. 26.

Consumer prices excluding fresh food probably fell 0.3 percent last month, according to estimates by Norinchukin’s Minami. The core inflation rate was positive between April and June based on the 2005 base.

“Expectations for inflation have barely risen in Japan,” said Hiroto Kuwahara, chief quantitative analyst at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, one of the 25 primary dealers obliged to bid at government debt sales. “Accordingly, demand for linkers is stagnant.”

The yen traded at around 76.70 per dollar in Tokyo on Wednesday, compared with ¥80.24 when Japan unilaterally sold its currency Aug. 4. It hit a record ¥76.25 March 17 amid speculation domestic companies would repatriate assets to cope with earthquake- and tsunami-related damages. The yen returned to such levels this month as investors sought a refuge from debt crises in the U.S. and Europe.

Japan’s 10-year bonds yielded 1.025 percent as of 10:29 a.m. Wednesday in Tokyo, or 0.825 percentage point more than the growth rate of consumer prices. The so-called real yield on similar-maturity U.S. debt was a negative 1.33 percentage points.

“There is a vicious cycle of yen appreciation and deflation,” said Masafumi Yamamoto, chief currency strategist at Barclays Bank PLC in Tokyo.

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