May 11, 2018 / 6:42 AM / 9 days ago

JGBs barely budge, 20-yr yield up after BOJ operation

TOKYO, May 11 (Reuters) - Japanese government bonds barely budged on Friday, but the yield on 20-year bonds rose slightly after the Bank of Japan’s buying in that maturity drew sizable selling interest.

The 10-year JGB yield was flat at 0.045 percent, while the 20-year JGB yield rose 0.5 basis point to 0.525 percent.

The BOJ’s operation to buy 190 billion yen ($1.74 billion) of JGBs with more than 10 to 25 years to maturity on Friday drew selling of 619.6 billion yen from brokers, the biggest in three months.

However, most other maturities were flat, including five-year and 30-year yield. They were at minus 0.105 percent and 0.735 percent respectively.

Ten-year JGB futures rose 0.03 point to 150.83, but they were flat on the week, with many investors expecting the market to move sideways given the Bank of Japan’s strong control of the market to keep the 10-year yield around zero percent.

Reflecting rising expectations of range-bound trading, S&P-JPX JGB Vix, a measure of JGB options implied volatilities, has hit a record low of 1.22 the previous day.

$1 = 109.42 yen Reporting by Tokyo Markets Team, Editing by Sherry Jacob-Phillips

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