JGBs mostly steady, short-end sags after BOJ tweaks operations

TOKYO: Japanese government bond prices were mostly steady on Monday following gains by U.S. Treasuries, although shorter-dated debt sagged with the Bank of Japan set to buy less of the maturities at its regular operations in April.

The benchmark 10-year JGB yield was flat at 1.065 percent and the 30-year yield dipped a basis point to 0.835 percent, supported by a regular debt-buying operation the BOJ conducted on Monday.

The two-year yield in contrast rose 2 basis points to minus 0.175 percent, its highest since late December.

As expected the central bank announced on Friday that it will trim the amount of one- to three-year and three- to five-year JGBs it buys in April, while leaving the purchase amounts of longer-dated JGBs unchanged.

The BOJ's massive bond-buying programme has reduced liquidity across maturities, leaving bond investors and dealers to often scramble for JGBs still available in the market. In an attempt to improve liquidity and reduce volatility, the BOJ has been tweaking its bond-buying.

Treasuries advanced on Friday after a chorus of Federal Reserve officials questioned the need for a faster pace of interest rate increases given tame inflation and just modest growth in the U.S. economy.