TOKYO: Japanese government bond prices rose on Thursday, getting a lift from a downturn in investors' appetite for risk and relief from a smooth sale of 1.2 trillion yen worth of 20-year debt.
On Wednesday evening, the Bank of Japan held its second meeting with JGB market participants to discuss its new monetary policy framework unveiled on April 4, under which it will double its bond purchases in two years in a bid to defeat deflation.
A senior BOJ said after the meeting that the central bank will consider increasing the frequency of its purchases of long-term JGBs in response to dealers' concerns about market distortions.
"The market is much calmer today," said Tomohiro Miyasaka, a fixed-income analyst at Credit Suisse Securities.
"It was not just the auction results, which were in line with our expectations, but also yesterday's BOJ meeting with JGB dealers at which the possibility of more frequent purchases of long-term debt was discussed," he said.
The yield on benchmark 10-year bonds fell 1.5 basis points to 0.585 percent after dropping as low as 0.570 percent, while ten-year futures ended up 0.37 point at 144.46, compared to their morning close of 144.21 before the 20-year sale results.
BoJ policy board member Ryuzo Miyao said on Thursday that the central bank would be flexible in its market operations to ensure bond yields fell across the curve and short-term rates remained very low.
Bonds also benefitted from weaker stocks and commodities, which sagged on continuing concerns about global growth.
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