TOKYO, Sept 30 The yield on benchmark 10-year
Japanese government bonds edged up on Friday as the Bank of
Japan trimmed the amount of long-term debt it buys at its
regular market operations.
The BOJ said it reduced its purchases of JGBs with five to
10 years of maturity to 410 billion yen ($4.04 billion) from 430
billion on Wednesday. It was not the first time the BOJ had
bought less than markets had expected.
The central bank decided at a policy meeting last week to
keep the 10-year JGB yield at around zero percent, and reducing
the amount of debt it buys at its regular operations is one way
it could achieve that goal.
The BOJ re-jigged its policy framework last week in an
attempt to control the yield curve, while trying to reassure
jittery markets that it would maintain its huge bond purchases
The bank now aims to steepen the yield curve, after a sharp
drop earlier this year in long-term yields deep below zero
flattened the curve and posed problems for financial
The 10-year JGB yield was last up 1.5 basis
points at minus 0.075 percent.
Early in July the benchmark yield, already on a steady
decline under the BOJ's massive debt-purchasing scheme, had
touched a record low of minus 0.300 percent as market turmoil
following the Brexit referendum boosted demand for safe-haven
"The BOJ appears to have acted to contain the decline by the
10-year yield before it reached minus 0.100 percent, a level
that is now likely to serve as the bottom of the yield's range,"
said Katsutoshi Inadome, senior fixed income strategist at
Mitsubishi UFJ Morgan Stanley Securities.
The central bank is due to announce the latest details of
its upcoming JGB-buying operations later on Friday.
"Given that the market is wary of consequences, like the yen
appreciating should the BOJ taper its JGB buying, a major change
to their debt-purchasing scheme seems unlikely," Inadome said.
($1 = 101.4700 yen)
(Reporting by the Tokyo markets team; Editing by Kim Coghill)