April 24, 2020 / 8:15 AM / a month ago

JGBs gain on caution over pandemic ahead of BOJ meeting

TOKYO, April 24 (Reuters) - Japanese government bond prices gained on Friday, supported by investors’ cautious mood on the global economic outlook ahead of the Bank of Japan’s policy meeting next week.

Benchmark 10-year JGB futures rose 0.34 points to 152.71. Trading volume topped 10,000 lots for the first time in two weeks.

The futures volume has fallen sharply after many traders started working from home following the government’s emergency declaration on the novel coronavirus.

The 10-year JGB yield fell 1.5 basis points to minus 0.025%.

Short-term yields also fell, with the two-year JGB yield down 2 basis points to minus 0.170%.

The five-year yield fell 2.5 basis points to minus 0.155%.

The Bank of Japan is expected to take further steps on Monday to ease funding strains for companies hit by the pandemic, such as boosting purchases of corporate bonds and commercial debt

The BOJ could scrap its obsolete bond-buying target to increase its bond holdings by 80 trillion yen a year.

While the BOJ would likely tout this as a show of resolve to buy unlimited amounts of bonds, market players might be more sceptical, given that for years the BOJ has been keeping its bond-buying well below target.

At the longer end of the market, the 20-year JGB yield was flat at 0.305% and the 30-year JGB yield was flat at 0.415%. (Reporting by Hideyuki Sano; Editing by Pravin Char)

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