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UPDATE 1-JGBs firm, taking cue from U.S. Treasury yields, BOJ ops
April 12, 2017 / 6:29 AM / 8 months ago

UPDATE 1-JGBs firm, taking cue from U.S. Treasury yields, BOJ ops

(Updates with JGB futures closing price, Kuroda comments)

TOKYO, April 12 (Reuters) - Japanese government bonds firmed on Wednesday, with the benchmark 10-year yield edging down to a four-month low, taking cues from U.S. Treasury yields and reduced purchases by the Bank of Japan in its bond-buying operations.

The benchmark 10-year JGB yield fell 1.5 basis points to 0.020 percent, its lowest since Dec. 1, while 10-year JGB futures finished up 0.22 point at 150.90 after earlier touching 150.97, their highest since Nov. 15.

U.S. Treasury yields slipped overnight as fresh concerns about the French presidential election and possible U.S. military action against Syria and North Korea spurred safe-haven demand, and continued to drop in Asian trading.

The 10-year Treasury yield stood at 2.290 percent , down from the U.S. close of 2.315 percent on Tuesday.

The Bank of Japan also trimmed its purchases of Japanese government bonds with three to five years left to maturity on Wednesday, buying 350 billion yen of them in its regular operations, down from 380 billion in previous operations.

“Overall, there was limited reaction to the BOJ, as the market focuses on Treasuries, whose yields appear to have moved into a new range,” said Tadashi Matsukawa, head of fixed income investment in Tokyo at PineBridge Investments.

In the superlong zone, the 20-year yield fell 2.5 basis points to 0.585 percent, its lowest since mid-January. The 30-year yield also shed 2.5 basis points to 0.810 percent after falling as low as 0.805 percent earlier, its deepest trough since late February.

Bank of Japan Governor Haruhiko Kuroda said on Wednesday that he will continue with the central bank’s quantitative easing and JGB yield curve control policy to meet its 2 percent inflation target.

Reporting by Tokyo markets team; Editing by Sunil Nair

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