February 22, 2017 / 3:52 AM / 6 months ago

JGBs firm, BOJ's buying offer operations in line with past amounts

TOKYO, Feb 22 (Reuters) - Japanese government bonds firmed on Wednesday after the Bank of Japan made purchase offers under its JGB buying operations that were in line with amounts of previous operations.

The 2-year JGB yield fell 2.5 basis points (bp) to minus 0.270 percent, its lowest level since November.

The benchmark 10-year JGB yield inched down 0.5 bp to 0.085 percent, while 10-year JGB futures were up 0.21 point at 150.17 in afternoon trade.

Some market participants had been concerned that the BOJ would buy less in some zones -- particularly at the shorter end, where supplies have been tight. Any reduction in purchases raises fears that the BOJ might be tapering its asset buying, and tends to weigh on bond prices.

But the BOJ offered to buy the same amounts as it has in its most recent operations earlier this month: 450 billion yen ($3.97 billion) of JGBs maturing in five to 10 years, 420 billion yen of JGBs maturing in three to five years, and 400 billion yen of JGBs maturing in one to three years.

BOJ Governor Haruhiko Kuroda told parliament on Wednesday that the BOJ's bond buying programme is proceeding smoothly and was unlikely to face any disruptions ahead. He also said the chance the central bank will deepen negative interest rates is low for now.

Superlong JGBs also gained, with the 20-year yield falling 1.5 bp to 0.690 percent and the 30-year JGB yield also shedding 1.5 bp to 0.900 percent. ($1 = 113.4100 yen) (Reporting by Tokyo markets team; Editing by Sunil Nair)

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