February 8, 2017 / 6:49 AM / a year ago

Superlong JGBs edge down ahead of 30-year sale

TOKYO, Feb 8 (Reuters) - Superlong Japanese government bonds edged down on Wednesday, with the 30- and 40-year yields touching one-year highs, as investors positioned for the following day’s 30-year sale.

The benchmark 10-year JGB yield was flat at 0.095 percent , while 10-year JGB futures finished up 0.06 point at 149.72.

The benchmark yield inched down from a session high of 0.100 percent after the Bank of Japan bought 450 billion yen ($4.01 billion) of JGBs maturing in more than five to 10 years, after buying the same amount in that zone on Monday. The central bank also made two 10-year JGB purchase offers on Friday.

Under its current monetary policy framework of “yield curve control” that the BOJ unveiled in September, the central bank aims to guide the 10-year JGB yield to around zero percent.

In a summary of opinions from the BOJ’s Jan. 30-31 policy meeting released on Wednesday, one board member said traders could start to question the central bank’s ability to control the yield curve during a bout of heightened uncertainty, and that the BOJ’s market operations desk would need more flexibility.

The BOJ has so far refrained from any steps to stem rising yields in the superlong zone. Yields have faced upward pressure as their global counterparts have risen in recent months, and continued their gradual ascent on Wednesday.

The 30-year yield rose 1 basis point to 0.910 percent , and the 40-year yield also added 1 basis point to 1.065 percent, their highest respective levels since February 2016.

On Thursday, the Ministry of Finance will offer 800 billion yen of 30-year JGBs.

The 20-year yield was flat at 0.715 percent, not far from last week’s high of 0.730 percent, which was its highest since February 2016. ($1 = 112.3400 yen) (Reporting by Tokyo markets team; Editing by Eric Meijer)

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