TOKYO May 31 Japanese government bonds edged
lower on Wednesday, though moves were small as investors awaited
details of the Bank of Japan's regular bond-purchasing
operations for June.
The central bank will announce the details of its buying
intentions in each zone for next month at 0800 GMT.
Most market participants expect the central bank to keep its
ranges intact, after it trimmed the amount of shorter-dated JGBs
it bought compared with previous months for May and April.
The 10-year cash JGB yield inched up half a
basis point to 0.040 percent, while 10-year JGB futures
erased early gains and ended down 0.08 point at 150.67.
The two-year yield rose half a basis point to minus 0.160
Undermining bond market sentiment, Japan's factory output
rebounded in April from March and grew at the fastest pace in
almost six years, taking production to its highest level since
Separate data released by the BOJ showed that Japanese banks
trimmed their holdings of JGBs by 3.2 percent in April from the
previous month, to a total of 78.9 trillion yen ($711.07
As the central bank has aggressively purchased JGBs to pump
cash into the market, financial institutions have been gradually
reducing their holdings. One of the key transmission channels of
the BOJ's stimulus is to prod banks into boosting lending and
steer them toward investing in riskier assets.
($1 = 110.9600 yen)
(Reporting by Tokyo markets team; Editing by Subhranshu Sahu)