REFILE-JGB yields inch higher ahead of 5-year debt auction

Mon Jan 20, 2014 9:55pm EST

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TOKYO, Jan 21 (IFR) - Japanese government bond prices edged down on Tuesday, with the five-year yield up ahead of an auction to sell 2.7 trillion yen ($26 billion) worth of the similar maturities.

JGB players expected the debt sale to go relatively smoothly, as large banks were likely to buy the new five-year bonds to sell them to the Bank of Japan, when it conducts its bond-buying programme, part of its plan to recharge the world's third-largest economy.

The BOJ is to conclude a two-day meeting on Wednesday, its first review in 2014. It is expected to keep monetary policy steady, becoming more confident about meeting its price goal on signs a broadening economic recovery may nudge firms into spending more on wages and investment.

The Japanese central bank stunned financial markets in April by promising to inject $1.4 trillion into the economy in less than two years.

Earlier, Japan's Economics Minister Akira Amari said based on current economic conditions the country has escaped deflation but there is still a risk that deflation could return.

The five-year yield was up 1 basis point at 0.210 percent.

The 10-year yield also added 1 basis point, to 0.670 percent, while the 10-year JGB futures slipped 12 ticks to 144.18.

The 20-year yield was up 0.5 basis point at 1.535 percent, while the 30-year yield edged 1 basis point higher at 1.700 percent.

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