March 3, 2017 / 4:30 AM / 9 months ago

JGBs steady to firmer, BOJ reduces buying in superlongs as expected

TOKYO, March 3 (Reuters) - Japanese Government Bond prices were steady to slightly firmer on Friday as the Bank of Japan’s bond purchase operation underscored limited selling interest from market players.

The BOJ reduced its buying in 25 to 40 year JGBs to 100 billion yen ($876 million) on Friday, 20 billion yen less than its previous operations, but traders say such a reduction was in line with expectations and did not hurt the market.

The 10-year JGB yield stood flat at 0.080 percent while the price of the benchmark 10-year JGB futures rose 0.06 point to 150.57.

On top of buying in the 25-40 year zone, the BOJ also bought the five- to 10-year tenors as well as 10-25 year maturities. All of its operations on Friday attracted limited selling from market players, underpinning the market.

The market’s mood has improved after the BOJ announced the schedule of its bond buying for March on Tuesday, reducing one big uncertainty.

“The market is relieved as we now know when the BOJ buys JGBs and we don’t need to worry about the BOJ suddenly skipping its bond buying,” said a senior trader at a Japanese bank.

The 20-year yield fell 1.0 basis point to 0.665 percent while the 30-year yield was flat at 0.865 percent .

The five-year JGB yield fell to minus 0.150 percent , its lowest level since mid-November. (Reporting by Tokyo Markets Team; Editing by Simon Cameron-Moore)

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