JGBs slip ahead of 30-yr sale, first since BOJ campaign unveiled

TOKYO, April 11 Wed Apr 10, 2013 10:29pm EDT

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TOKYO, April 11 (Reuters) - Japanese government bond prices dropped on Thursday as the Ministry of Finance offered 30-year bonds in the first auction of any maturity since the bank of Japan unveiled its radical monetary expansion scheme.

* JGBs have been highly volatile since the BOJ said a week ago that it would embark on the world's most intense monetary stimulus, which will pump about $1.4 trillion into the economy in less than two years.

* "My feeling is that there are plenty of people who want to buy 30-year bonds, but they will probably hold off and wait for the market to settle down, and watch the impact of the BOJ's move," said a fixed-income fund manager at a Japanese trust bank.

* The finance ministry offered 600 billion yen ($6.1 billion) of 30-year bonds, reopening issue number 38 with a coupon of 1.8 percent.

* Ten-year JGB futures ended morning trade sharply lower on hedge selling ahead of the sale, down 0.47 point to 143.69, after dropping as low as 143.40.

Futures also dropped sharply in evening trade on Wednesday, prompting the Tokyo Stock Exchange to briefly halt trading.

* Yields on benchmark 10-year bonds added 4 basis points to 0.620 percent after earlier matching the previous session's high of 0.630 percent, their highest level in about a month. The benchmark yield plunged to a record low of 0.315 percent on Friday.

* The 30-year yield rose 3 basis points to 1.480 percent, and the 20-year yield gained 3.5 basis points to 1.395 percent.

* Short- and medium-term maturities also dropped, with the five-year yield hitting a fresh one-year high, adding half a basis point to 0.280 percent after rising as high as 0.320 percent.

The two-year yield rose 1.5 basis points to 0.135 percent after rising as high as 0.140 percent, its highest since December 2011.

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