March 6, 2017 / 6:45 AM / 6 months ago

Superlong JGBs firm as 30-year auction awaited

TOKYO, March 6 (Reuters) - Benchmark Japanese government bonds edged down slightly on Monday, though the superlong zone firmed as investors awaited an auction of 30-year JGBs.

The benchmark 10-year JGB yield rose 0.5 basis point (bp) to 0.075 percent, while 10-year JGB futures ended down 0.01 point at 150.59.

The 20-year yield was down 2 bps at 0.635 percent, and the 30-year JGB yield fell 1.5 bps to 0.835 percent.

Underpinning JGBs, U.S. Treasury yields edged lower after North Korea fired four ballistic missiles early on Monday, three of which landed in Japan’s exclusive economic zone.

The safe-haven demand helped push down the yield of benchmark 10-year U.S. Treasury notes to 2.474 percent in Asian trading, from Friday’s U.S. close of 2.492 percent.

Last week, the Bank of Japan announced the schedule of its bond buying operations for March, which had been a source of investors’ uncertainty.

In its operations on Friday, the BOJ trimmed its purchases of 25 to 40 year JGBs to 100 billion yen ($876 million), 20 billion yen less than its previous amount, but the reduction was in line with expectations and had little impact on market sentiment.

Bank of Japan Deputy Governor Hiroshi Nakaso on Friday told a New York economic forum that the current policy framework offers the flexibility and sustainability to achieve the BOJ’s “strong commitment” to raising inflation to its 2 percent goal. (Reporting by Tokyo markets team; Editing by Shri Navaratnam)

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