TOKYO, June 15 Japanese government bonds firmed
on Thursday, taking cues from U.S. Treasuries as investors await
Bank of Japan's meeting later this week.
The 10-year cash JGB yield edged down half a
basis point to 0.055 percent, while the September 10-year JGB
futures contract added 0.10 point to finish at 150.46.
The yield curve flattened slightly as prices rose in the
superlong zone, with the 20-year JGB yield
falling 1.5 basis points to 0.555 percent, and the 30-year JGB
yield shed one basis point at 0.795 percent.
On Friday, the BOJ is widely expected to keep its monetary
policy unchanged, and reassure markets it will lag the Fed in
tapering its massive stimulus programme, as Japan's inflation
remains low despite a strengthening economy.
BOJ Governor Haruhiko Kuroda is also seen dismissing market
speculation that the central bank is engaging in "stealth
tapering" by stressing that the recent slowdown in its Japanese
government bond buying is simply the result of a stable bond
market, according to sources familiar with the BOJ's thinking.
In its purchase operations on Thursday, the BOJ bought 280
billion yen ($2.55 billion) of one- to three-year JGBs, 300
billion yen of three- to five-year JGBs and 100 billion yen of
An overnight drop in U.S. Treasury yields added pressure to
The U.S. Federal raised interest rates on Wednesday as
widely expected, and gave its first clear outline on its plan to
reduce its $4.2-trillion bond portfolio.
But the moves were overshadowed by inflation and retail
sales data earlier in the day that fell short of market
expectations, and sent the benchmark 10-year U.S. Treasury yield
to a seven-month low.
The Fed also tweaked down its inflation forecast, saying it
expects U.S. inflation to be at 1.7 percent by the end of this
year, down from the 1.9 percent it previously expected.
($1 = 109.5900 yen)
(Reporting by Tokyo markets team; Editing by Sherry