July 30, 2019 / 4:38 AM / 22 days ago

JGBs unmoved after BOJ stands pat, focus on Fed

TOKYO, July 30 (Reuters) - Japanese government bond prices barely budged on Tuesday after the Bank of Japan kept its monetary policy on hold as expected, with investors shifting their focus to the U.S. Federal Reserve’s policy announcement later this week.

The BOJ, however, did say that it would ease its policy without hesitation if needed, but that hardly impressed investors given the perception that BOJ’s ammunition is limited with already low interest rates and massive asset purchases.

More relevant to many investors is forward guidance from the U.S. Federal Reserve, which is widely expected to cut interest rates for the first time in more than a decade on Wednesday, in the backdrop of headwinds from the U.S.-China trade war.

Hints of aggressive easing could trigger a fresh round of yield hunting, and put pressure on bond yields around the world, including JGBs.

Benchmark 10-year JGB futures rose 0.03 point to 153.72 in slow trade, with trading volume failing to reach 10,000 by early afternoon.

In the cash bond market, the 10-year JGBs traded flat at minus 0.150%, while the 20-year bonds were untraded.

The 30-year JGB yield was flat at 0.365%.

At the shorter end, the five-year JGB yield fell 0.5 basis point to minus 0.240%. (Reporting by Tokyo Markets Team; Editing by Shounak Dasgupta)

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