September 29, 2017 / 6:25 AM / a year ago

JGBs bounce back after BOJ purchase draws limited selling

TOKYO, Sept 29 (Reuters) - Japanese government bond prices rebounded on Friday, following a big decline in the previous session, after the Bank of Japan’s bond purchase showed limited selling interest and as U.S. bonds stabilised.

The 10-year JGB yield dropped 0.5 basis point to 0.060 percent, while the price of benchmark December futures rose 0.09 point to 150.35, a day after it posted the biggest loss in three months.

The market calmed down as many Japanese investors stayed on the sidelines on the last day of their financial half-year.

The BOJ’s bond buying attracted limited selling despite the market’s fall the previous day. The central bank’s buying of 200 billion yen ($1.77 billion) worth 10-25 year bonds drew offers at 2.5 times that amount, compared with 3.7 times on Wednesday.

Its buying of bonds with more than 25 years to maturity saw selling of 3.1 times the BOJ’s 100 billion yen bids, a lower ratio than three previous occasions.

The 20-year yield rose 1.5 basis points to 0.580 percent , while the 30-year yield rose 1.5 basis points to 0.865 percent.

The market showed no reaction to a barrage of Japanese economic data released in the morning. Core consumer inflation in August was 0.7 percent, in line with market expectations. ($1 = 112.6800 yen) (Reporting by Tokyo Markets Team; Editing by Biju Dwarakanath)

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