TOKYO, March 10 Short-term Japanese government
bond yields ticked up on Friday after the Bank of Japan reduced
its purchase in those maturities, while longer-dated bonds were
mixed ahead of U.S. jobs data later in the day.
The BOJ reduced its purchases of one- to three-year JGBs to
300 billion yen ($2.60 billion) on Friday, 20 billion yen less
than its previous purchase of those maturities last week, and
the smallest amount since September 2014.
The two-year yield rose 1.5 basis points to minus 0.255
But market players said the move was not a surprise given
the shortage of two-year notes in the market.
Also for the same reason, the BOJ also reduced buying in
discount bills, to 250 billion yen, the smallest amount since
That helped to lift the three-month bill yield
by 1.5 basis points to minus 0.399 percent.
Other maturities were steadier, with the 10-year yield down
0.5 basis point at 0.080 percent, while the
20-year yield up 1.0 basis point at 0.675
The price of March 10-year JGB futures rose 0.05
point to 150.43. The benchmark status is expected to
shift to the June contract, which rose 0.03 point to
Japanese bonds held relatively stable despite the fall in
European and U.S. bonds after the European Central Bank
signalled there was no longer a sense of urgency to prop up the
"The ECB in a sense is saying it is not going to do more
QEs. And markets now think the ECB is not just tapering but
raising rates quite early, pricing in 70-80 percent chance of a
rate hike of 10 basis points in the second quarter of next
year," said Hideki Kishida, a senior strategist at Nomura
The Japanese derivatives markets are
pricing in no real chance of a rate hike in the coming year.
(Reporting by Tokyo Markets Team; Editing by Subhranshu Sahu)