February 26, 2018 / 7:18 AM / 3 months ago

JGBs mixed after BOJ operation draws sizable selling

TOKYO, Feb 26 (Reuters) - Japanese government bond prices were mixed on Monday as their rally ran out of steam after the Bank of Japan’s bond buying operation drew sizable selling from brokers.

The BOJ’s buying of 450 billion yen ($4.23 billion) JGBs with more than five to 10 years left to maturity on Monday drew offers of 1.8279 trillion yen, 4.06 times the BOJ’s purchase.

The ratio was highest for the BOJ’s buying in those maturities since October, suggesting brokerages’ long positions have grown bigger after the recent rally.

The 10-year JGB yield was steady at 0.045 percent, staying near two-month lows hit last week. The price of 10-year JGB futures rose 0.08 point to 150.97.

Japanese bond prices had rallied this month in the wake of a global stock selloff that raised the allure of safe-haven JGBs.

While bond markets in the United States and Europe face pressure from concerns about inflation and tightening in monetary policy, the BOJ is seen as nowhere near raising its target in interest rates and bond yields.

The 20-year yield rose 0.5 basis point to 0.550 percent from a five-month low of 0.545 percent, while the 30-year yield rose 0.5 basis point to 0.755 percent from a 10-month low of 0.750 percent.

But the 40-year yield dipped 0.5 basis point to 0.880 percent.

$1 = 106.48 yen Reporting by Tokyo Markets Team; Editing by Jacqueline Wong

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