TOKYO: Japanese government bonds edged up on Monday, underpinned by Bank of Japan buying of JGBs as part of their massive asset purchase programme.
Cash activity was limited to transactions among dealers, JGB traders said.
As widely expected, the BOJ offered to buy 900 billion yen($8.23 billion US dollars) of JGBs in the 1-year to 10-year zone.
JGBs in the 20-year zone remained modestly firmer in the morning session on the back of relatively stable 30-year U.S. Treasury prices on Friday, despite a sharp rebound in U.S. stock prices.
Several Japanese corporate pension funds will try to sell superlong JGBs on strength on Monday, while several passive pension funds are likely to buy superlong JGBs for their month-end duration adjustments, market participants said.
Several commercial banks are expected to sell mid-term and long-term JGBs early next month. Monday is the first JGB trading day of the second half on a settlement-date basis.
The yield on the current 10-year JGBs inched down 0.5 basis point to 0.510 percent, compared with 0.515 percent earlier, ahead of Thursday's monthly 2.4 trillion yen 10-year JGB auction.
The 20-year yield also slipped 0.5 basis point to 1.340 percent. The 5-year and the 30-year JGBs were not yet actively priced among brokers.
Lead 10-year December JGB futures moved in a 145.88-145.96 range before finishing midday up 0.06 point at 145.94.
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