TOKYO, June 2 (IFR) - Japanese government bond prices slipped on Monday as stocks rallied, sending yields up ahead of a 10-year sale on Tuesday.
In the morning session, several regional banks bought 3-year JGBs in larger-than-usual lots, market participants said.
The Bank of Japan offered to purchase 150 billion yen ($1.47 billion) in JGBs maturing in more than 10 years in addition to 110 billion yen in JGBs maturing in less than one year.
Some market participants were surprised by the BOJ’s offer to buy superlong JGBs ahead of Tuesday’s monthly 10-year JGB auction. The central bank reduced its purchase amount to 150 billion yen from 170 billion yen for the first time.
Finance ministry data released early on Monday showed Japanese companies raised capital expenditure in January-March for a third straight quarter, suggesting that revised data will show the economy maintained its fastest growth in more than two years.
The data helped the Nikkei stock average add 1.8 percent. Many domestic pension funds have not bought enough Tokyo stocks so far, according to one corporate pension fund manager at a large domestic trust bank.
The yield on the current 5-year JGB added 0.5 basis point from Friday to 0.175 percent, while the 10-year yield rose 1 basis point to 0.580 percent ahead of Tuesday’s monthly 2.4 trillion 10-year JGB auction.
In the superlong zone, the 20-year yield rose 1 basis point to 1.445 percent, while the 30-year yield climbed 1 basis point to 1.690 percent ahead of Thursday’s monthly 400 billion yen 30-year JGB auction.
Ten-year lead June JGB futures moved in a 145.37-145.45 range before finishing the morning session down 0.10 point at 145.40. ($1 = 101.7450 Japanese yen) (Reporting by Masatsugu Hisatsune; Editing by Jacqueline Wong)