TOKYO, April 19 (Reuters) - Japanese government bond prices gained on Friday, with the superlong sector continuing to outperform after this week’s smooth 20-year sale and as market participants welcomed the Bank of Japan’s change to its bond-buying operations.
* The BOJ said late on Thursday that it will increase the frequency of its JGB purchases to eight times a month from six, while keeping its planned total amount of monthly purchases at its initially announced 7.5 trillion yen ($76.36 billion).
The central bank also tweaked its purchase plans to a targeted range for monthly buying in each sector rather than from a specific target, which traders say will allow it more flexibility in its purchases in response to supply conditions.
On Friday, the BOJ offered to buy a total of 800 billion yen worth of JGBs maturing in more than 5 years, consisting of 300 billion yen with more than 10 years left to maturity and 500 billion yen with 5 to 10 years left to maturity.
* With the BOJ’s operational changes and solid demand at Thursday’s auction of 1.2 trillion yen worth of 20-year debt, some market participants said the recent volatility in the JGB market might have calmed down for now and Friday’s bull-flattening trend could remain through next week.
* “Yields are coming down on the long end, and we might not see any significant rise anywhere on the curve next week, ahead of Golden Week,” said a fixed-income fund manager at a Japanese asset management firm.
* Japanese markets will be closed on April 29, May 1, and May 3 for the Golden Week holidays. Ahead of that, the BOJ will hold a policy meeting on April 26, at which it will update its forecasts. Market participants are waiting to see whether BOJ Governor Haruhiko Kuroda’s two-year timeframe to attain its 2 percent inflation target becomes an official projection.
* The yield on benchmark 10-year bonds fell 3 basis points to 0.555 percent, while ten-year futures ended morning trade up 0.20 point at 144.66.
* The superlong sector extended its gains, soothed by the previous session’s smooth 20-year sale.
The 20-year yield fell 8 basis points to a one-week low of 1.415 percent, while the 30-year yield also shed 8 basis points to 1.525 percent.