November 27, 2017 / 6:52 AM / in a year

JGBs slip on BOJ buying cuts; 40-year auction eyed

TOKYO, Nov 27 (Reuters) - Japanese government bond prices dipped on Monday as cautious traders adjusted their positions ahead of a 40-year JGB auction amid worries about further cuts in the Bank of Japan’s bond buying.

The market braces for the auction of 40-year JGBs worth 500 billion yen ($4.5 billion) on Tuesday.

The 10-year JGB yield climbed 1.0 basis point to 0.035 percent, while the benchmark December 10-year JGB futures price dipped 0.09 point to 150.93.

The 30-year yield rose 1.5 basis points to 0.840 percent , its highest in three weeks. The BOJ left traders shocked by reducing its purchase in 25- to 40-year JGBs on Friday.

“After the BOJ’s cut in its buying of long-date bonds, it has become difficult to bet on the flattening of the yield curve,” said Ryoko Tada, fixed income analyst, Nomura Securities.

$1 = 111.34 yen Reporting by Tokyo Markets Team; Editing by Sherry Jacob-Phillips

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