JGBs dip on BOJ Kuroda's view on long-term rates

TOKYO, July 16 Tue Jul 15, 2014 10:25pm EDT

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TOKYO, July 16 (Reuters) - Japanese government bond prices edged lower on Wednesday, weighed by Bank of Japan Governor Haruhiko Kuroda's remarks the previous day that the current level of long-term rates was low.

Kuroda, speaking to the press on Tuesday after a two-day monetary policy meeting, said long-term rates at around 0.5 percent was rather low even when considering that inflation expectations held by market participants were more conservative than the central bank's.

"Even the BOJ may be concerned about its monetary policy having a stronger impact than anticipated. The central bank could have sent a warning against an excessive fall in yields," said a trader at a Japanese bank in Tokyo.

The BOJ unveiled aggressive monetary policy steps in April 2013 to combat deflation and shore up the economy, and the benchmark 10-year JGB yield had drifted down to a 15-month low of 0.530 percent last week.

The central bank expects consumer inflation to accelerate towards its 2 percent target next year, a view many bond market participants do not share.

The 10-year yield stood at 0.545 percent, 1 basis point higher on the day.

September 10-year futures fell 0.03 point to 145.84. (Reporting by Shinichi Saoshiro and Tokyo markets team; Editing by Jacqueline Wong)

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