January 31, 2018 / 2:05 AM / a year ago

JGBs rise after BOJ increases buying; 10-yr yield off 6-1/2-month high

TOKYO, Jan 31 (Reuters) - Japanese government bond prices edged up on Wednesday after the Bank of Japan increased its buying in maturities, a move seen as a warning shot against further rise in JGB yields.

The BOJ increased the amount it bought in Japanese government bonds of three- to five years left to maturity, in the medium tenor to 330 billion yen ($3.03 billion) from 300 billion yen in its previous operations.

The increased buying came after the 10-year yield had risen to a 6-1/2-month high of 0.095 percent on Tuesday, near the BOJ’s widely perceived defence line of 0.11 percent. The BOJ’s policy guidance is to control the 10-year yield “around zero percent.”

The move was a bit of surprise to market players, who had expected the BOJ to stick to the status quo in its market operations.

The BOJ maintained the purchase amount of three other maturity zones it offered to buy on Wednesday - one to three-years, 10 to 25 years and 25 to 40 years.

The 10-year JGB futures price extended gains to 150.27 , up 0.10 point for the day. The yield on the benchmark 10-year cash JGBs fell 0.5 basis point to 0.085 percent .

The five-year yield dipped 0.5 basis point to minus 0.080 percent.

$1 = 108.93 yen Reporting by Hideyuki Sano, Editing by Sherry Jacob-Phillips

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