Benchmark JGBs steady in quiet trade

15 Jan, 2015

TOKYO: Benchmark Japanese government bonds were steady on Thursday in relatively quiet trade, while the price of the 5-year JGB inched down as investors positioned for an auction in that tenor next week.

The 10-year yield was flat on the day at 0.250 percent, after dropping as low as 0.240 percent earlier.

Prices of superlong bonds moved slightly higher. The 20-year yield edged down half a basis point to 0.910 percent, up from 0.900 percent earlier, while the 30-year yield was down 1 basis point at 1.090 percent from the previous day, but up from a session low of 1.080 percent.

As widely expected, the Bank of Japan offered to buy 240 billion yen ($2.04 billion) of JGBs in the 10-year to 25-year zone and 140 billion yen of JGBs with maturities over 25 years, as well as 400 billion yen of JGBs in the 3-year to 5-year zone and 400 billion yen of JGBs in the 1-year to 3-year zone. The BOJ bought JGBs in the same combination of zones and amounts on Jan. 9, under its massive easing programme.

Results of Thursday's JGB buying operations were largely in line with market expectations, and had limited impact on JGBs, traders said.

One large domestic commercial bank was said to have sold 5-year JGBs in relatively large lots, to either shift into higher-yielding JGBs, or to buy the new 5-year JGBs in next Tuesday's monthly 5-year sale. The 5-year yield added 1 basis point to 0.015 percent.

Lead 10-year March JGB futures ended down 0.03 point at 148.36.

Copyright Reuters, 2015

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