Sunday, March 26

Japan’s 10-year bond yields fall after BOJ flags unlimited buying

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TOKYO — Japan’s benchmark 10-year government bond yields fell on Monday after the Bank of Japan flagged it would buy an unlimited amount of the debt to prevent yields from going higher.

The central bank said last week it would buy an unlimited amount of 10-year government bonds at 0.25% to prevent rising global yields from pushing up domestic borrowing costs too much.

Prospects of accelerated US policy tightening and bets that the BOJ would need to taper its ultra-loose monetary policy soon sent the benchmark 10-year yields to 0.230% by last week, the highest level since 2016 and close to the implicit 0.25% cap the BOJ set around its target of 0%.

The 10-year JGB yield fell 1.5 basis points to 0.210% in early trade, after rising to 0.230% by last week.

Benchmark 10-year JGB futures rose 0.14 point to 150.21, with a trading volume of 4,408 lots.

Yields on longer ended notes advanced, with the 20-year JGB yield rising one basis point to 0.665% and the 30-year JGB yield rising one basis point to 0.880%.

The two-year JGBs, the five-year bonds or the 40-year JGBs have not been traded yet.

(Reporting by Junko Fujitan and Toko markets team. Editing by Gerry Doyle)