TOKYO: Japanese government bond prices gained on Friday, with the superlong sector continuing to outperform after this week's smooth 20-year sale and as market participants welcomed the Bank of Japan's change to its bond-buying operations.
The BoJ said late on Thursday that it will increase the frequency of its JGB purchases to eight times a month from six, while keeping its planned total amount of monthly purchases at its initially announced 7.5 trillion yen ($76.36 billion).
The central bank also tweaked its purchase plans to a targeted range for monthly buying in each sector rather than from a specific target, which traders say will allow it more flexibility in its purchases in response to supply conditions.
On Friday, the BOJ offered to buy a total of 800 billion yen worth of JGBs maturing in more than 5 years, consisting of 300 billion yen with more than 10 years left to maturity and 500 billion yen with 5 to 10 years left to maturity.
With the BoJ's operational changes and solid demand at Thursday's auction of 1.2 trillion yen worth of 20-year debt, some market participants said the recent volatility in the JGB market might have calmed down for now and Friday's bull-flattening trend could remain through next week.
"Yields are coming down on the long end, and we might not see any significant rise anywhere on the curve next week, ahead of Golden Week," said a fixed-income fund manager at a Japanese asset management firm.
Japanese markets will be closed on April 29, May 1, and May 3 for the Golden Week holidays. Ahead of that, the BoJ will hold a policy meeting on April 26, at which it will update its forecasts. Market participants are waiting to see whether BoJ Governor Haruhiko Kuroda's two-year timeframe to attain its 2 percent inflation target becomes an official projection.
The yield on benchmark 10-year bonds fell 3 basis points to 0.555 percent, while ten-year futures ended morning trade up 0.20 point at 144.66.
The superlong sector extended its gains, soothed by the previous session's smooth 20-year sale.
The 20-year yield fell 8 basis points to a one-week low of 1.415 percent, while the 30-year yield also shed 8 basis points to 1.525 percent.
Comments
Comments are closed for this article.