TOKYO: Japanese government bonds rose on Wednesday, as the Bank of Japan's smooth JGB purchase operations reassured investors.
The benchmark 10-year JGB yield edged down 1 basis point (bp) to minus 0.090 percent, its lowest since Aug 24. December 10-year futures ended up 0.21 point at 152.36.
The operations were the first under the central bank's new monetary policy framework announced last week, and market participants were relieved that the purchase offers were in line with past amounts.
Sagging Japanese equities and a drop in overseas yields also helped underpin JGB market sentiment.
U.S. long-dated Treasury debt yields fell to three-week lows on Tuesday on concerns about ongoing problems at Deutsche Bank, Germany's largest lender, which could again delay the next interest rate hike by the Federal Reserve, while Japan's Nikkei stock index shed 1.3 percent on Wednesday.
The BOJ offered to buy a total of 1.14 trillion in JGBs under its asset purchase programme, comprised of 400 billion yen in the 1- to 3-year zone, 420 billion yen in the 3- to 5-year zone, 200 billion in the 10- to 25-year zone, and 120 billion yen of superlong JGBs maturing in 25 to 40 years.
The two-year JGB yield shed 3 bps to minus 0.300 percent , its lowest since July 29, amid expectations that the BOJ will deepen its negative interest rate policy.
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