TOKYO Feb 15 Japanese government bonds mostly
edged down on Wednesday, taking their cue from weaker U.S.
Treasuries after the U.S. Federal Reserve chair took a more
hawkish tone than many investors had expected.
The benchmark 10-year JGB yield rose 0.5 basis point (bp) to
0.095 percent, while 10-year JGB futures were
flat at 149.86 at the end of morning trade.
U.S. Treasury yields jumped on Tuesday after Fed Chair Janet
Yellen said it would be unwise to wait too long to raise
The Bank of Japan offered on Wednesday to purchase 400
billion yen ($3.50 billion) of one- to three-year JGBs, 420
billion yen of three- to five-year JGBs, and 450 billion yen of
five- to 10-year JGBs in its bond buying operations.
Last week, the BOJ increased its buying in the superlong
zone, for only the second time in that sector since September,
in response to rising yields.
The 20-year yield added 1 bp to 0.705 percent
on Wednesday, while the 30-year JGB yield rose 1
bp to 0.900 percent, both below their respective one-year highs
of 0.730 percent and 0.915 percent hit earlier this month.
"Market moves are very small today, and the market has
returned to what has been normal in recent months," said a
fixed-income fund manager at a European asset management firm in
Investors had been pondering how far the BOJ would go to
attain its stated aims since last September, when the central
bank adopted its "yield curve control" policy under which it
pledged to keep the 10-year yield around zero percent.
The curve steepened slightly as the two-year yield
fell 0.5 bp to minus 0.230 percent, while the
five-year yield was flat at minus 0.095 percent.
Shorter maturities have remained firm, thanks to steady demand
from foreign investors and a scarcity of supply.
On Tuesday, the BOJ lent a record amount of five-year JGBs
at its regular operation, having induced a severe shortage that
has crimped activity in the debt market.
According to BOJ data, the central bank held about 60
percent of the current issues of five-year JGBs as of the end of
($1 = 114.3300 yen)
(Reporting by Tokyo markets team; Editing by Eric Meijer)