TOKYO: Japanese government bond prices slipped on Wednesday as investors booked gains after a Bank of Japan-inspired rally. December 10-year JGB futures slipped 0.03 point to 146.67.
The 20-year JGB yield rose 1.5 basis points to 1.205 percent.
The yield had plunged 12 basis points over the past two sessions after the BOJ wrong-footed markets on Friday with a surprise decision to expand its monetary easing programme.
"Investors like pension funds seem to be taking profits in the super long maturities after their yields came under strong downward pressure following the BoJ's move," said a dealer at a domestic bank.
Immediate focus was on the 2.4 trillion yen ($21.14 billion) 10-year JGB auction, the first major debt sale the Ministry of Finance is conducting after Friday's BOJ easing.
The Government Public Pension Fund (GPIF), the largest public pension fund in the world, announced on Friday that it will cut allocations of government debt in its portfolio and increase its holdings of domestic equities and foreign assets.
Market players do not expect the GPIF decision to have a strong impact on the 10-year auction or the market as a whole, with BoJ's accelerated buying of JGBs under its enhanced easing scheme expected to comfortably offset any selling of government debt by the giant fund.
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