TOKYO Feb 6 Yields on 10-year Japanese
government bond stabilised on Monday after the Bank of Japan
extended buying in that maturities for the second straight day
to quell market anxiety about the BOJ's stance on bond
The central bank bought 450 billion yen ($4 billion) of
bonds with maturity of more than five to 10 years on Monday. The
move followed its two separate purchases of the 10-year bonds on
Although it was not usual for the BOJ to buy the same
maturities for two sessions in a row, many market players
expected the central bank to do so after Friday's sell-off.
Overall, the BOJ on Friday bought 450 billion yen of
five-to-ten year debt and then offered to buy an unlimited
amount of 10-year JGBs at a fixed yield of 0.110 percent when it
became clear its earlier operation was ineffective in halting
The tactic showed the BOJ was prepared to go the distance
to control the yield at its policy target of "around zero
On Monday, the 10-year yield stood flat at 0.095 percent
, moving off Friday's one-year high of 0.150
"The market calmed down after a fashion. But it remains
fragile," said Keiko Onogi, senior strategist at Daiwa
The yields on other maturities, however, rose back as many
investors were unsure about the BOJ's strategy due to its
seemingly inconsistent stance in its bond buying operation since
late last month.
On Jan. 25, the BOJ surprised markets by skipping a chance
to buy short-term bonds, sparking speculation that it may be
starting to gradually reduce its bond purchase.
The BOJ has so far not taken any visible steps to halt rises
in yields on superlong bonds - 20-year bonds or longer
maturities - even though their yields have risen 30-50 basis
points since the central bank had introduced the "yield curve
control" policy in September.
In Monday's afternoon trade, the 20-year yield rose 2.5
basis points to 0.710 percent , near 11-month
high of 0.730 percent hit on Friday.
The 30-year yield rose 2.5 basis points to 0.890 percent
, with investors cautious head of an auction of
30-year bonds on Thursday.
Shorter yields also rose, with five-year yield rising 1.0
basis point to minus 0.090 percent.
The price of 10-year JGB futures dropped 0.14 point to
($1 = 112.42 yen)
(Reporting by Tokyo Markets Team; Editing Shri Navaratnam)