February 5, 2018 / 7:00 AM / 14 days ago

Japanese bonds little changed as markets heed BOJ's signal

TOKYO, Feb 5 (Reuters) - Japanese government bond prices were steady on Monday despite a sell-off in global bonds after the Bank of Japan last week sent a strong signal to markets of its determination to keep JGB yields from rising.

The 10-year JGB yield stood flat at 0.080 percent , off a seven-month high of 0.095 percent touched last week.

On Friday the BOJ announced a special JGB buying operation, offering to buy 10-year bonds at 0.110 percent. In addition, it also increased the amount of buying in its regular buying of JGBs with over five to ten-years to maturity.

The measures sent a strong signal to market players that the BOJ would not tolerate rises in the 10-year yield above 0.110 percent, keeping JGB bears from testing the BOJ’s resolve.

The 10-year JGB futures price was up 0.04 point higher at 150.32.

The 20-year yield rose 0.5 basis point to 0.590 percent while the 30-year yield ticked up 0.5 basis point to 0.820 percent.

JGBs had been under pressure as global bond yields have soared on expectations that inflation may finally gain momentum on the back of solid global economic growth and U.S. President Donald Trump’s spending and tax cuts plans.

The 10-year U.S. bond yields rose to a four-year peak of 2.870 percent on Monday.

Reporting by Tokyo Markets Team Editing by Shri Navaratnam

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