August 28, 2017 / 6:44 AM / 3 months ago

JGB yields pull back from lows after subdued BOJ operation results

TOKYO, Aug 28 (Reuters) - Japanese government bond yields pulled back from recent lows as soft results to the Bank of Japan’s debt-buying operations provided an opportunity for the market to consolidate.

The five-year yield edged up half a basis point to minus 0.130 percent after falling to minus 0.140 percent on Friday, its lowest since May 9.

The five-year JGB yield had tracked a rise in yields of U.S. Treasuries and other debt, touching a 1-1/2-year high of minus 0.035 percent on July 10.

But the five-year yield has declined since as prospects of the Federal Reserve aggressively hiking interest rates have ebbed, and as the BOJ calmed market sentiment by opting to buy more medium-term JGBs

The 20-year yield was up half a basis point at 0.545 percent. It had declined to an 8-1/2-month low of 0.535 percent on Thursday.

The 30-year yield rose half a basis point to 0.835 percent following a drop to 0.815 percent late last week, its lowest in two months.

The BOJ on Monday bought 710 billion yen ($6.50 billion) of one to 10-year JGBs as part of its regular debt-purchasing programme.

The central bank’s bid to buy JGBs received relatively strong offers to sell by investors, which market participants generally consider as a bearish sign.

JGB losses, however, were limited as U.S. Treasuries gained on Friday after Fed Chair Janet Yellen did not mention monetary policy at a gathering of central bankers held over the weekend in Jackson Hole, relieving some investors who thought she might make hawkish comments on the economy.

($1 = 109.1500 yen)

Reporting by the Tokyo markets team; Editing by Sunil Nair

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