JGBs mostly higher as BOJ buys more three- to five-year debt

TOKYO: Japanese government bonds were mostly higher on Wednesday, with sentiment bolstered by the Bank of Japan's move to increase its purchases of three- to five-year JGBs in its market operations to curb a recent rise in short-term yields.

The 10-year cash JGB yield was flat on the day at 0.090 percent, while the September 10-year JGB futures contract finished up 0.10 point at 149.88.

In the superlong zone, the 20-year JGB yield fell one basis point to 0.625 percent, while the 30-year JGB yield also fell one basis point at 0.895 percent.

The 5-year JGB yield was flat on the day at minus 0.040 percent. The five-year yield on Monday rose to minus 0.035 percent, its highest rate in nearly 1-1/2-years.

The BOJ offered to buy 330 billion yen ($2.90 billion) of JGBs in the three- to five-year zone on Wednesday, up from 300 billion yen at its previous purchase operations.

While the central bank does not have an explicit target for the five-year yield, it aims to keep the benchmark 10-year yield "around zero percent" even as it has come under upward pressure from rising global yields.

On Friday, after the benchmark 10-year JGB yield scaled a five-month high of 0.105 percent, the BOJ announced unlimited 10-year JGB purchases at 0.110 percent, and an increase in its regular buying in that maturity through an auction.