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JGBs fall on global bond weakness, caution over BOJ operation plan
June 30, 2017 / 6:52 AM / 6 months ago

JGBs fall on global bond weakness, caution over BOJ operation plan

TOKYO, June 30 (Reuters) - Japanese government bond prices fell across the board, with the 10-year futures posting their biggest decline since November on Friday, weighed down by a retreat in global bonds and caution over the Bank of Japan’s debt-buying operation plan for July.

The September 10-year JGB futures fell 0.33 point to 150.11.

The benchmark 10-year JGB yield rose 3 basis points to 0.085 percent, its highest since mid-March. The 30-year yield touched 0.855 percent, a level last seen on April 6.

“The biggest bearish factor for JGBs today was the rise in yields of debt markets overseas. And while the BOJ probably won’t reduce its JGB buying amount at such a juncture, there are always fears that it would do so,” said Shuichi Ohsaki, a fixed-income strategist at Merrill Lynch Japan Securities.

“Also, some participants likely wanted to sell and lighten their positions and reduce exposure to potential risk before the weekend.”

The BOJ will disclose the details of its buying operations in each zone for next month at 17:00 JST (0800 GMT). The BOJ kept its ranges intact in June, after trimming the amount of shorter-dated JGBs it bought compared with previous months in May and April.

With a list of negative factors dogging JGBs, there were more sellers than anticipated for the BOJ’s offer on Friday to buy 450 billion yen ($4 billion) of five- to 10-year bonds, usually interpreted as a bearish market sign.

U.S. and euro zone government bond yields have risen to multi-week highs as growing expectations that central banks in Europe are poised to begin scaling back their monetary easing programmes.

$1 = 111.9700 yen Reporting by the Tokyo markets team; Editing by Sunil Nair

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