TOKYO, April 10 Japanese government debt prices
fell on Wednesday ahead of an auction of 30-year bonds this
week, with investors locking in profits on sharp gains made
after the Bank of Japan announced sweeping stimulus measures.
Yields on benchmark 10-year bonds added 3
basis points to 0.555 percent, hitting a one-week high and
pulling further away from a record low of 0.315 percent hit on
Friday. Ten-year JGB futures fell 0.08 point to 144.59.
"People, probably banks, are moving away from the 5-year and
below sectors, and are trying to put money into the long-end of
the curve," said Tadashi Matsukawa, head of Japan fixed-income
at PineBridge Investments.
"They haven't done that in a massive way because there is a
30-year auction tomorrow. The market may go down more so they
are just waiting to buy cheaply."
The Ministry of Finance is to sell 600 billion yen ($6.1
billion) worth of 30-year bonds on Thursday. It is its first
auction of any maturity after the BOJ unveiled on April 4 that
it planned to inject $1.4 trillion into the world's
third-largest economy in less than two years by buying
government bonds across the yield curve as well as riskier
The 30-year yield rose 6.5 basis points to
1.450 percent, although it was still below the level it was
trading a day before the central bank announcement.
The 20-year yield gained 4 basis points to
1.335 percent, also still holding below the level the day before
the BOJ decision.
"What the BOJ are doing is that they are buying the five- to
10-year sectors. They just completed the first purchase on
Monday. Probably they will do another round of purchases on
Friday or maybe next Monday," Matsukawa said.
"But eventually after that's done, I think the five- and
10-year sector inventories will dry up. Demand and supply will
be tight going into the month-end, so although (prices) are
going down now, the market will probably go up after the 30-year
The five-year yield put on 1 basis point to
0.210 percent, a far cry from its record low of 0.095 percent
touched on March 4.