TOKYO: Japanese government bond prices rose on Friday, with the longer zones outperforming after the Bank of Japan said it plans to increase the average remaining maturity of its JGB holdings.
The BOJ kept intact its policy target of increasing base money - or cash and deposits in circulation - at an annual pace of 80 trillion yen ($655 billion), and said it would extend the average remaining maturity of its JGB purchases to about 7-12 years from the beginning of next year, from its current target of about 7-10 years.
The central bank also decided to expand the range of assets it purchases, in a move it referred to as "supplementing" its massive asset purchase programme.
"Companies and households are shifting away from their deflationary mindset under our quantitative and qualitative easing (QQE) programme," the BOJ said in a statement announcing the decision.
"There are many companies that are actively spending on capital expenditure and human resources. We hope such moves broaden further.
From this standpoint, the new measures are aimed at supplementing QQE," it said.
The benchmark 10-year JGB yield shed 1.5 basis points to 0.280 percent, after earlier touching 0.265 percent, its lowest level since January.
March 10-year JGB futures hit a record high of 149.18 before the BOJ decision was announced, and were last up 0.16 point at 149.03.
The superlong end outperformed, with the yield on the newly issued 20-year JGB shedding 3 basis points to 1.010 percent after dropping as low as 1.000 percent, its lowest since February. The 30-year JGB yield slipped 4 basis points to 1.300 percent, while the 40-year JGB yield skidded 4.5 basis points to 1.430 percent.
Comments
Comments are closed for this article.