* Superlong zone underperforms after weak 30-year sale
* 10-yr futures end more than 1 point above morning close
* BOJ gives details of its Friday JGB purchases under new
TOKYO, April 11 Japanese government bond prices
mostly reversed their earlier losses after the Bank of Japan
announced details of its second and third operations under its
new easing regime, offsetting disappointing results at a 30-year
The superlong zone remained in negative territory after weak
demand at the first auction of any maturity since the central
bank unveiled its radical monetary expansion scheme.
"The 10-year sector rebounded the announcement,
however, the bad auction result has impacted on the over-10-year
sector," said a fixed-income fund manager at a Japanese asset
management firm in Tokyo.
The BOJ announced shortly after midday that it will buy 300
billion yen ($3.0 billion) in government debt with maturities of
10 years or more on Friday, 1 trillion yen of JGBs with
maturities from five to 10 years, 1.1 trillion yen in debt from
the 1-5 year zone and 110 billion yen in debt maturing in one
year or less.
Ten-year JGB futures, which had plunged on
hedge-selling ahead of the auction, sharply recovered and ended
just four ticks shy of their session high, up 0.57 point at
Futures closed morning trade more than a whole point below
that, down 0.47 point at 143.69, after dropping as low as
143.40. Futures had also dropped sharply in evening trade on
Wednesday, prompting the Tokyo Stock Exchange to briefly halt
Yields on benchmark 10-year bonds fell 3
basis points to 0.550 percent, sharply down from their morning
high of 0.630 percent, which matched the previous session's
The benchmark yield plunged to a record low of 0.315 percent
on Friday, in the wake of BOJ's announcement a week ago that it
will embark on the world's most intense monetary stimulus
programme, which will pump about $1.4 trillion into the economy
in less than two years.
Short- and medium-term maturities also rose off their
session lows on Thursday, with the five-year yield
falling 8 basis points to 0.195 percent after hitting a fresh
one-year high in the morning of 0.320 percent.
The two-year yield was flat at 0.120 percent
after earlier rising as high as 0.140 percent, its highest since
TAIL WIDENED AT 30-YEAR SALE
Most market participants had anticipated a less than stellar
30-year sale, as many investors opted to sit out and evaluate
supply conditions in the wake of the BOJ's monetary policy
overhaul, so the sale was in line with grim expectations.
The Ministry of Finance offered 600 billion yen ($6.1
billion) of 30-year bonds, reopening issue number 38 with a
coupon of 1.8 percent.
The bonds sold at a worse-than-expected lowest price of
105.20. The sale drew bids of 3.64 times the amount offered, up
from the previous sale's bid-to-cover ratio of 3.33 times. But
the tail between the average and lowest accepted prices surged
to 1.16 from 0.16 at last month's offering, indicating weaker
"Everyone was looking for a weak print. The expectations
were very low, but if you look at the tail beyond one yen,
that's a big figure," said Shogo Fujita, chief Japan bond
strategist at Bank of America Merrill Lynch.
"I think it's safe to say that the auction was rather weak,
but it may not have been weaker than expected," he added.
The 30-year yield rose 5 basis points to
1.500 percent, and the 20-year yield gained 5.5
basis points to 1.415 percent.