JGBs steady, likely to be supported by quarterly-redemption buying

Thu Jun 19, 2014 11:47pm EDT

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TOKYO, June 20 (IFR) - Japanese government bond prices were steady in quiet trading on Friday, with investors expected to buy on any dips to prepare for this session's quarterly redemption.

The Bank of Japan refrained from making any purchases under its massive asset-buying scheme, but domestic real-money accounts are likely to make redemption-related purchases later in the session, market participants said.

The Japan Securities Dealers Association published its monthly data on secondary market JGB transactions, which showed trust banks were net sellers in both mid- and long-term JGBs in May, while turning net sellers of domestic (non-JGB) notes and bonds for the first time since Oct 2010.

The data had little immediate impact on the JGB market, as trust banks have been trying to sell JGBs to the BOJ directly.

At midday, the yield on the current 10-year JGBs was up 0.5 basis point at 0.590 percent, while the 20-year yield was flat at 1.465 percent, compared with 1.455 percent earlier in the session.

The 30-year yield edged down 0.5 basis point to 1.710 percent, after moving in a 1.700 percent to 1.715 percent range in the morning session.

Ten-year lead September JGB futures moved in a narrow range of 145.34 to 145.39 before finishing at midday up 0.03 point at 145.37. (Reporting by Masatsugu Hisatsune; Editing by Kim Coghill)

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