TOKYO, Jan 22 (IFR) - Japanese government bond prices inched
higher on Wednesday, though many real money accounts remained
largely sidelined as the Bank of Japan was not active in the
The BOJ was absent in the market under its scheme to
recharge the world's third-largest economy, as it concluded a
two-day policy meeting.
The BOJ kept monetary policy steady and maintained its
upbeat inflation forecasts, suggesting that no imminent monetary
easing is on the horizon as the country's economic recovery
The soft yen, which inflates import costs, has helped Japan
pass the halfway mark toward its 2 percent inflation target with
prices in November up 1.2 percent from the year before.
The Japanese central bank stunned the financial markets in
April by promising to inject $1.4 trillion in the economy in
less than two years.
The 10-year yield was down 1 basis point at
0.675 percent, while 10-year JGB futures rose 12 ticks
to 144.15, holding just below their five-day moving average of
Relatively stable U.S. Treasuries and German Bunds overnight
had some positive impact on the JGBs.
The longer-dated sectors underperformed ahead of an auction
of 1.2 trillion yen ($11.5 billion) of 20-year JGBs on Thursday.
Both the 20- and 30-year yields
slipped 0.5 basis point, to 1.540 and 1.705 percent,
The spread between the 10- and 20-year yields narrowed to
86.5 basis points after holding at 87 basis points, a one-month
high for a few sessions.
One money manager at a domestic mutual fund said he expected
the spread to widen to around 100 basis points, the highest
level since Feb. 26 2012, due to weak demand from domestic life
insurers at current levels.