TOKYO Dec 29 Japanese government bonds firmed
on Thursday, getting a lift from stronger U.S. Treasuries, as
investors geared up for the long New Year's holiday and awaited
details of the Bank of Japan's purchase plans for next month.
The benchmark 10-year yield edged down 1
basis point (bp) to 0.045 percent, while 10-year JGB futures
ended up 0.31 point at 150.25.
A well-bid 5-year U.S. note auction on Wednesday helped push
benchmark U.S. Treasury yields to their lowest levels in two
On Friday evening, the BOJ will release the details of its
bond buying operations for January. Many analysts and market
participants expect no major change to the central bank's
operational purchases, though some said adjustments cannot be
ruled out as the BOJ could reduce its buying in line with
expected lower issuance.
Japan plans to trim the issuance of Japanese government
bonds of up to 20 years to maturity during the fiscal year
starting April 1 in reaction to soft demand for negative- or
low-yielding bonds, the Ministry of Finance said last week.
Under its policy framework adopted in September, the BOJ
guides the 10-year government bond yield around zero percent.
One of the BOJ's board members was quoted as saying at this
month's rate review that the bank should be flexible about
raising its bond yield target and allow long-term interest rates
to increase if such moves reflected improvements in the economy,
according to a summary of opinions at the Dec. 19-20 meeting
released on Thursday.
"I am opposed to setting the 10-year bond yield target
around zero percent, and believe the yield curve should be
allowed to steepen a bit more," the board member said.
(Reporting by Tokyo markets team; Editing by Richard Borsuk)