JGBs slip as investors await BOJ's June purchase details

TOKYO: Japanese government bonds edged lower on Wednesday, though moves were small as investors awaited details of the Bank of Japan's regular bond-purchasing operations for June.

The central bank will announce the details of its buying intentions in each zone for next month at 0800 GMT.

Most market participants expect the central bank to keep its ranges intact, after it trimmed the amount of shorter-dated JGBs it bought compared with previous months for May and April.

The 10-year cash JGB yield inched up half a basis point to 0.040 percent, while 10-year JGB futures erased early gains and ended down 0.08 point at 150.67.

The two-year yield rose half a basis point to minus 0.160 percent.

Undermining bond market sentiment, Japan's factory output rebounded in April from March and grew at the fastest pace in almost six years, taking production to its highest level since 2008.

Separate data released by the BOJ showed that Japanese banks trimmed their holdings of JGBs by 3.2 percent in April from the previous month, to a total of 78.9 trillion yen ($711.07 billion).

As the central bank has aggressively purchased JGBs to pump cash into the market, financial institutions have been gradually reducing their holdings. One of the key transmission channels of the BOJ's stimulus is to prod banks into boosting lending and steer them toward investing in riskier assets.