TOKYO, Aug 11 (IFR) - Japanese government bond prices were
slightly lower on Monday, though above session lows in quiet
Activity was thin as many market participants are taking
days off this week for Japan's traditional Obon summer holidays.
In the morning session, domestic real money accounts were
largely sidelined, with the Bank of Japan's purchases comprising
most of the action.
Under its massive quantitative easing programme, the BOJ
offered to buy 400 billion yen ($3.92 billion) of JGBs in the
5-year to 10-year zone, 200 billion yen of JGBs in the 3-year to
5-year zone, and 300 billion yen of JGBs in the 1-year to 3-year
zone. The BOJ purchased JGBs in the same zones and amounts on
June 4, June 16, June 19, June 25, July 1 and July 28.
One money manager at a large domestic life insurance company
told IFR that the reason the yields on the current 10-year and
20-year JGBs have fallen back to their April 2013 levels was
because the BOJ had been buying them since that month.
Yields came under further pressure on Friday as U.S. air
strikes against Islamist militants in Iraq increased the
safe-haven appeal of fixed-income assets. U.S. Treasury yields
dropped to 14-month lows.
By midday, the yield on the current 5-year JGBs
was up 0.5 basis point from Friday at 0.150
percent, while the 10-year yield was up 0.5 basis
point at 0.510 percent, compared with 0.515 percent earlier in
In the superlong zone, the 20-year yield was
up 1 basis point at 1.370 percent compared with 1.375 percent
earlier on Monday, while the 30-year yield was up
0.5 basis point at 1.680 percent from 1.685 percent earlier.
On Tuesday, the Ministry of Finance will offer 600 billion
yen of 30-year JGBs, re-opening the current issue (number 43)
for the regular settlement date. JGB investors, therefore, do
not need to adjust yields between the current issue and the new
one. The average auction yield over the last 12 months was 1.688
percent, while the 30-yield has been moving in a range between
1.645 percent on July 24-30 and 1.725 percent on July 11, with
the simple mean at 1.685 percent.
Ten-year lead September JGB futures moved in a
narrow 146.06-146.13 range before finishing at midday down 0.05
point at 146.11.
($1 = 102.1600 Japanese yen)
(Reporting by Masatsugu Hisatsune; Editing by Jacqueline Wong)