JGB yields fall as investors await BOJ’s bond-buying plans

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TOKYO — Japanese government bond yields fell on Thursday, as investors awaited the Bank of Japan’s bond-buying plans for the July-September period due later in the day for which expectations were divided.

Focus is on whether the central bank will boost the amount of bonds with longer maturities it would offer to buy, as yields on the longer ends this week rose to their highest in more than six years.

“Unless the BOJ boosts the amounts of longer-ended bonds it would offer to buy, there will be an ongoing upward pressure on the 10-year bond yields,” said a market participant at a domestic brokerage.

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“The BOJ will end up buying a large amount of the bonds.”

But another market participant at a different domestic brokerage said the central bank would maintain the amount because yields on overseas bonds have been falling.

U.S. Treasury yields declined for a second consecutive day on Wednesday as the market took a cool view of the Federal Reserve’s ability to corral inflation without throwing the economy into recession.

The 20-year JGB yield fell 2 basis points to 0.890% and the 30-year JGB yield fell 3.5 basis points to 1.235%.

The 40-year JGB yield fell 4 basis points to 1.335%.

Yields on shorter-ends also fell, with the two-year JGB yield falling 1 basis point to -0.060%.

The five-year yield fell 1.5 basis points to 0.020%.

Benchmark 10-year JGB futures rose 0.06 point to 148.69, with a trading volume of 8,517 lots.

The 10-year JGB yield was flat at 0.225%.

(Reporting by Tokyo markets team; Editing by Amy Caren Daniel)

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