TOKYO Dec 21 Japanese government bond prices
edged higher in thin trading on Wednesday, as investors wound
down for the upcoming holidays.
The benchmark 10-year yield fell 0.5 basis
point (bp) to 0.060 percent, while 10-year JGB futures
finished up 0.08 point at 149.81.
In the superlong zone, the 20-year JGB yield
fell 1 bp to 0.555 percent, while the 30-year JGB yield
shed 0.5 bp to 0.660 percent,
Underpinning JGBs, Bank of Japan Governor Haruhiko Kuroda on
Tuesday quashed market speculation that the central bank may
soon consider raising interest rates as Japanese yields have
risen in line with global bond yields. Kuroda instead vowed to
keep policy loose to achieve the BOJ's 2 percent inflation goal,
even as the BOJ issued a more upbeat economic assessment.
While the central bank is mulling eventual policy
adjustments, it is nowhere close to an interest rate hike. BOJ
sources have said it is more open to discussing raising its
10-year bond yield target, and could even contemplate doing it
at some point in 2017.
On Wednesday, Japan's government joined the central bank in
upgrading its overall assessment of the economy, enhancing its
view on household spending, exports and business sentiment,
saying consumers' mindsets are improving and exports to Asia are
Ahead of the Christmas weekend, Friday is a public holiday
in Japan. With the BOJ's final meeting of the year out of the
way, many investors are closing out positions for the year.
"Moves are very small. We saw few flows today and trading
has been very thin," said Keiko Onogi, senior strategist at
"Longterm JGBs traded firmly, particularly in the afternoon
session, so the curve faced some flattening pressure today," she
said. "But I don't think this is a trend, as the market will
probably stay peaceful through the end of the year."
(Reporting by Tokyo markets team; Editing by Eric Meijer)