JGBs narrowly mixed, unmoved as BOJ stays pat

Wed Sep 4, 2013 11:09pm EDT

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TOKYO, Sept 5 (IFR) - Japanese government bond prices were unmoved by the Bank of Japan holding its monetary stance unchanged, as expected, at the end of policy meeting, having opened narrowly mixed on Thursday, with the 10-year/20-year yield curve flattening modestly by 1 basis point.

* While keeping policy steady, the BOJ revised up its assessment of the economy, encouraged by growing signs the effects of the stimulus are broadening.

* Super-long JGBs turned moderately firmer after opening steady, supported by buying on dips by a few domestic lifers, traders said. Mid-term to long-term JGBs softened as U.S. Treasury yields for those zones continued to rise overnight.

* On Wednesday, one large trust bank bought a relatively large amount of 5-year JGBs maturing in one-and-a-half years, while some overseas funds sold super-long JGBs. This morning, several regional banks were trying to buy 10-year JGBs on dips, according to JGB traders.

* The yield on the current 5-year JGBs was flat at 0.270 percent, while the yield on 10-year JGBs was flat at 0.770 percent, compared with 0.780 percent earlier.

In the super-long zone, yields on both 20-year JGBs and 30-year JGBs were down 0.5 basis point, at 1.690 percent and 1.805 percent respectively.

JGB futures ended morning trade up 0.07 point at 144.04, oscillating in a 143.86-144.05 range. The Nikkei 225 index was up 0.04 percent at 14,060.52, with dollar/yen hovering around 99.71 yen, after hitting 99.83 yen, compared with 99.41-99.81 yen on Wednesday in Tokyo.

* JGB players wer also awaiting Friday's vital U.S. employment data, ahead of the results of Tokyo's bid for the 2020 Olympics due early Sunday morning.

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