February 28, 2018 / 3:55 AM / in a year

JGBs track Treasuries lower, impact from reduced BOJ buying limited

TOKYO, Feb 28 (Reuters) - Japanese government bond prices edged lower on Wednesday as the market was weighed down following a retreat by U.S. Treasuries.

The two-year yield rose 0.5 basis point to minus 0.160 percent and the benchmark 10-year yield climbed 0.5 basis point to 0.045 percent.

JGB losses were limited as Tokyo stocks fell, with the Nikkei declining more than 1 percent.

The bond market showed little reaction to the Bank of Japan’s decision to trim the amount of 25- to 40-year JGBs it offered to buy on Wednesday to 70 billion yen ($653.29 million)from 80 billion yen at the previous operation last week.

The central bank often tweaks the amount of JGBs it buys at its regular operations as part of its yield curve control scheme and the reduction on Wednesday was seen by dealers as an attempt to arrest the recent decline by super-long yields.

The 40-year yield stood unchanged at 0.885 percent after dropping to 0.875 percent on Friday, the lowest since January 2017.

U.S. Treasury prices slipped overnight after Federal Reserve Chairman Jerome Powell said data since December pointed to a strengthening economy and his confidence had increased that inflation will rise. ($1 = 107.1500 yen) (Reporting by the Tokyo markets team; Editing by Sunil Nair)

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