TOKYO: Japanese government bond yields rose from multi-month lows on Wednesday, buoyed by the Bank of Japan’s (BOJ) decision to reduce the purchase amounts of some bonds at its regular buying operations.
The BOJ offered to buy 525 billion yen ($3.84 billion) of bonds with 5-10 years remaining to maturity, down from 575 billion yen on Nov. 15.
That was already a step down from 675 billion yen in previous offers. The central bank also reduced its purchase offer for bonds with more than 25 years to maturity, to 75 billion yen from 100 billion yen a week earlier.
All the amounts were within the BOJ’s guidance range for the operations.
The 10-year JGB yield rose 1.5 basis points (bps) to 0.710% as of 0330 GMT, after dropping as low as 0.690% on Tuesday for the first time since Sept. 11 amid a pullback in US Treasury yields.
Japan’s benchmark had been as high as 0.97% at the start of this month, a decade-peak.
“The decline in yields up until yesterday was at a rapid pace, so I think (the BOJ) wanted to curb it,” said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management.
JGB yields fall to multi-month lows tracking US yields, smooth auction
“I think it fell a bit too low when it fell below 0.7%.” Benchmark 10-year JGB futures fell 0.17 yen to 146.13.
The 20-year JGB yield rose 3.5 bps to 1.430%, while the 30-year yield rose 4.5 bps to 1.635%, after both sank to multi-month troughs on Tuesday.
The five-year yield rose 1 bp to 0.280%.
The two-year JGB had yet to trade on the day.
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