TOKYO: The Bank of Japan (BOJ) on Wednesday reduced offer amounts for its regular buying of Japanese government bonds (JGBs), as the 10-year government bond yield slipped to its lowest level in a month.
The BOJ offered to buy 575 billion yen ($3.82 billion) of 5-10 year JGBs, compared with 675 billion yen in previous offers.
The 10-year JGB yield fell to 0.775% in early trade, its lowest level since Oct. 17, after US Treasury yields sank overnight as softer-than-expected consumer inflation data drove investor bets that an era of interest rate rises was over.
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“The BOJ wanted to contain sharp declines in yields,” said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management. “The central bank does not want see large volatility in yield movement. They try to contain sharp movements in yields both ways.”
Yields across the curve fell, with the five-year yield slipping 6 bps to 0.340% and the two-year JGB yield slipping 3.5 bps to 0.050%, both at their lowest in a month.
The 30-year JGB yield fell 9 bps to 1.665%, its lowest since Oct. 12.
The 20-year JGB yield fell 9 bps to 1.475%, its lowest since Sept. 29.
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