September 3, 2018 / 8:25 AM / 17 days ago

JGBs dip on speculation BOJ may reduce bond purchase in Sept

TOKYO, Sept 3 (Reuters) - Japanese government bond prices fell on Monday on speculation the Bank of Japan may reduce the overall size of its government bond purchase this month after it made small tweaks to its monthly buying plan.

The BOJ reduced the frequency of its buying in one to three, three to five, and five to 10-year bonds to five times in September from six times in August while increasing the maximum amount of its buying in each operation in these maturities.

Market players suspect the net result of those changes will be a smaller total buying in September. For clues on the central bank’s stance, they are keenly looking to the BOJ’s first operation in September on Tuesday.

The BOJ is scheduled to conduct buying in four maturity zones, one to three years, three to five years, over 10 to 25 years and over 25 years on Tuesday.

The benchmark 10-year cash JGB yield rose 1.5 basis point to 0.115 percent, its highest in a month.

The 20-year yield rose half a basis point to 0.625 percent, the highest since Aug. 8.

The 30-year JGB yield climbed half a basis point to 0.850 percent

The two-year and five-year JGB yields rose one basis point each to minus 0.110 and minus 0.070 percent, respectively.

Ten-year JGB futures fell 0.13 point to 150.25, retracing some losses after touching their lowest since Aug. 10 at 150.20.

JGBs weakened even as yields on longer-dated U.S. Treasuries rose on Friday on news that Canada and the United States had failed to reach a deal on the North American Free Trade Agreement. (Reporting by Tokyo Markets Team; Editing by Subhranshu Sahu)

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