TOKYO, Aug 20 (IFR) - Benchmark Japanese government bond
prices edged slightly down on Wednesday in quiet trade, while
other tenors were steady as buying by the Bank of Japan
supported the market.
As widely expected, the BOJ offered to buy 300 billion yen
(2.91 billion US dollar) of JGBs in the 1-year to 3-year zone;
200 billion yen in the 3-year to 5-year zone; 100 billion in the
10-year to 25-year zone, including the new 20-year JGBs (issue
number 149); and 30 billion yen in the 25-year to 40-year zone.
The zones and amounts of BOJ buying were largely in line
with market expectations. Under its JGB purchase program begun
in April 2013, the BOJ has never failed to buy superlong JGBs on
the trading days following 20-year, 30-year and 40-year JGB
Several pension funds and regional banks sold 5-year to
7-year JGBs to shift into superlong JGBs to earn extra income.
Some market participants also expect index-linked funds to buy
superlong JGBs next week for their month-end duration
adjustments in addition to the BOJ's buying operations.
At midday, the yield on the current 5-year JGBs was
unchanged from Tuesday at 0.150 percent, while the benchmark
10-year yield inched up 0.5 basis point to 0.500
The yield on the new 20-year JGBs (re-opened
issue number 149) was flat at 1.340 percent, compared with the
1.342 percent average accepted yield in Tuesday's monthly 1.2
trillion yen 20-year JGB auction.
In the longer-dated zone, the 30-year yield
was flat at 1.650 percent, while the 40-year yield was flat at
1.790 percent ahead of next Tuesday's quarterly 400 billion
40-year JGB auction to re-open the current issue (number 7).
In the morning session, 10-year lead September JGB futures
moved in a 146.13-146.22 range before finishing at
midday down 0.06 point at 146.13.
The JGB market largely shrugged off trade data released in
the morning that showed Japan's exports rose in July for the
first time in three months, in a tentative sign that overseas
demand is starting to recover.
(1 US dollar = 102.9400 Japanese yen)
(Reporting by Masatsugu Hisatsune; Editing by Simon