* Superlong bonds outperforms after 20-yr sale meets solid
* Hopes of more frequent BOJ bond purchases support market
* MOF data show Japan investors sold overseas bonds last
TOKYO, April 18 Japanese government bond prices
rose on Thursday, getting a lift from a downturn in investors'
appetite for risk and relief from a smooth sale of 1.2 trillion
yen worth of 20-year debt.
On Wednesday evening, the Bank of Japan held its second
meeting with JGB market participants to discuss its new monetary
policy framework unveiled on April 4, under which it will double
its bond purchases in two years in a bid to defeat deflation.
A senior BOJ said after the meeting that the central bank
will consider increasing the frequency of its purchases of
long-term JGBs in response to dealers' concerns about market
"The market is much calmer today," said Tomohiro Miyasaka, a
fixed-income analyst at Credit Suisse Securities.
"It was not just the auction results, which were in line
with our expectations, but also yesterday's BOJ meeting with JGB
dealers at which the possibility of more frequent purchases of
long-term debt was discussed," he said.
The yield on benchmark 10-year bonds fell 1.5
basis points to 0.585 percent after dropping as low as 0.570
percent, while ten-year futures ended up 0.37 point at
144.46, compared to their morning close of 144.21 before the
20-year sale results.
BOJ policy board member Ryuzo Miyao said on Thursday that
the central bank would be flexible in its market operations to
ensure bond yields fell across the curve and short-term rates
remained very low.
Bonds also benefitted from weaker stocks and commodities,
which sagged on continuing concerns about global growth.
The Ministry of Finance offered the newly issued bonds with
a coupon of 1.5 percent, below the 1.6 percent coupon on the
Disappointing demand at a sale of 30-year bonds a week ago
had raised concerns that many investors were sidelined by recent
volatile market conditions, after the BOJ's radical monetary
policy overhaul on April 4.
The 20-year JGBs sold at a lowest price of 99.45. The sale
drew bids of 3.68 times the amount offered, up from the previous
sale's bid-to-cover ratio of 3.11 times. The tail between the
average and lowest accepted prices came in at 0.21, down
slightly from 0.24 at last month's offering, indicating solid
The superlong sector extended its morning gains in afternoon
trade. The 20-year yield fell 4.5 basis points to
1.475 percent and the 30-year yield shed 4 basis
points to 1.605 percent.
Weekly data from the ministry of finance showed that
Japanese investors did not seek overseas debt despite the recent
domestic market uncertainty and volatility, with last week
showing net selling of foreign bonds to the tune of 332 billion
Expectations of a surge of Japanese cash into overseas debt
has pushed down yields in many bond markets around the world.