November 1, 2017 / 5:36 AM / a year ago

JGBs lifted by upbeat 10-year sale

TOKYO, Nov 1 (Reuters) - Japanese government bonds mostly firmed on Wednesday, bolstered by solid demand at an auction of 10-year JGBs.

The benchmark 10-year cash JGB yield edged down half a basis point to 0.060 percent, though the 10-year JGB futures contract inched down 0.02 point at 150.45 in afternoon trade.

The Ministry of Finance offered 2.3 trillion yen of 10-year JGBs with a 0.10 percent coupon, and said 80.1558 percent of the bids accepted at the lowest price of 100.37.

The sale drew bids of 4.55 times the amount offered, up from the previous sale’s bid-to-cover ratio of 4.08 times.

The Bank of Japan said on Tuesday that it will maintain the ranges of Japanese government bonds it intends to buy in November from its October purchase plans.

The central bank also kept monetary policy steady as expected and roughly maintained its ambitious price forecasts, pointing to signs of growing strength in the economy.

But BOJ board newcomer Goushi Kataoka dissented to the decision to stand pat, and said the BOJ should buy government bonds so 15-year yields “remain at less than 0.2 percent.” Takatoshi Ito, an academic who is a potential candidate to become the next BOJ governor, said on Wednesday that the central bank likely won’t be able to exit its massive stimulus programme while inflation is hovering below 1 percent. (Reporting by Tokyo markets team; Editing by Subhranshu Sahu)

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