Japan MOF to boost buybacks of CPI-linked JGBs

TOKYO, March 27 (Reuters) - Japan's Ministry of Finance said on Thursday it planned to buy back 320 billion yen ($3.2 billion) of consumer price index-linked government bonds in the first half of the fiscal year starting in April.

That would be double the amount of inflation-linked bonds the MOF bought back during the fiscal year ending this month.

Analysts see the move as an attempt to help shore up the market for inflation-linked bonds, which have been battered by heavy selling from overseas investors in the past few months as the global credit crunch worsened.

The MOF has said it plans to use 9.8 trillion yen from special-account reserves to redeem government bonds to help trim state debt. Of the total, about 3 trillion yen will be used to buy back bonds from the market, including 1.2 trillion yen of 15-year floating rate JGBs. (Reporting by Chikako Mogi)