TOKYO, Sept 5 Japanese government bond prices
pared losses on Monday after Bank of Japan Governor Haruhiko
Kuroda signalled his readiness to ease monetary policy further,
which kept a rein on bond yields that hit five-month highs
earlier in the day.
The 10-year bond yield was flat at minus 0.025 percent
, having retreated from the day's high of minus
0.010 percent touched in the morning, its highest level since
Fresh reassurance from Kuroda that the central bank
continues to look to boost prices by monetary easing stemmed
selling in JGBs.
Kuroda signalled his readiness to ease monetary policy while
admitting the BOJ's negative interest rate policy may impair
financial intermediation and hurt public confidence in Japan's
Long-dated JGBs have been under pressure in recent weeks on
speculation that the BOJ could possibly tweak its policy to
steepen the yield curve to cushion the blow of negative interest
rates on banks' profitability.
Despite Monday's rebound in JGB prices, steepening in the
JGB yield curve has continued, partly due to Kuroda's mention of
the cost of the current policy framework.
The yield spread between five-year bonds and 30-year bonds
widened to 69 basis points, the highest since late March, and
having almost doubled from the record low of 35 basis points
touched in June.
The 30-year yield rose 3.5 basis points at one point to
0.540 percent, hitting their highest level since
late March, and last stood at 0.525 percent, up 2.0 basis points
on the day.
The 20-year yield also rose 3.5 basis points to 0.430
percent before slipping back to 0.405 percent,
still up 1.0 basis point on the day.
Shorter maturities fared better, with the five-year yield
flat at minus 0.155 percent and the two-year yield
at minus 0.190 percent.
The 10-year JGB futures price rose 0.09 point to 151.19
(Reporting by Tokyo Markets Team; Editing by Jacqueline Wong)