TOKYO Dec 20 The prices of Japanese government
bond ticked up on Tuesday after the Bank of Japan kept its
policy steady, a move that appears to set it apart from the
other central banks that are scaling back stimulus.
The BOJ maintained its twin targets of minus 0.10 percent
interest on some excess reserves and the zero percent 10-year
government bond yield.
Although such an outcome was widely expected, there was
speculation that the BOJ could indicate it could raise its
target in the 10-year JGB yield in light of big rise in global
bond yields and higher growth expectations in the United States.
The 10-year JGB yield dipped 0.5 basis point to 0.070
percent, slipping further from Friday's
10-1/2-month high of 0.100 percent.
The 30-year yield dropped 2.0 basis points to 0.675 percent
, easing from 0.805 percent hit a week ago, while
the 20-year yield dipped 1.5 basis points to
0.575 percent from last week's 0.650 percent.
Yields on superlong maturities such as 20- and 30-year bonds
started to decline after the BOJ increased its buying in those
sectors last Wednesday.
Many market players still think Japanese bonds could come
under renewed pressure if the U.S. bond yields and the dollar
rise further on expectations of President-elect Donald Trump's
The U.S. Federal Reserve indicated it could raise rates
three times next year after it hiked its rates earlier this
month, while the European Central Bank announced it will reduce
its bond purchase from April.
Many analysts now expect the BOJ to raise its target for the
10-year JGB yield some time next year.
"At the moment, two percent inflation is nowhere near sight
so they will have to keep rates on hold but they could have some
justifications for moving up the 10-year yield based on
developments in foreign markets," said Naoya Oshikubo, yen rates
strategist at Barclays.
(Reporting by Hideyuki Sano; Editing by Sherry Jacob-Phillips)