July 19, 2018 / 5:49 AM / a month ago

Super-long JGBs edge up after central bank's debt-buying operation

TOKYO, July 19 (Reuters) - Prices of super-long Japanese government bonds edged higher on Thursday, drawing support from the central bank’s regular debt-buying operation.

The 20-year yield dipped 0.5 basis point to 0.480 percent , with the Bank of Japan’s decision to trim the amount of bonds it offered to buy at Thursday’s regular operation having little impact.

The BOJ on Thursday offered to buy 60 billion yen ($532.20 million) of 25- to 40-year JGBs, down from 70 billion yen at the previous operation last week.

The central bank also trimmed the amount of 10- to 25-year JGBs it offered to purchase to 180 billion yen from 190 billion yen.

The BOJ regularly tweaks the amount of JGBs it buys at its operations, which are conducted as part of its yield curve controlling scheme.

The central bank was seen to have reduced the amount of longer-dated JGBs it offered to buy on Thursday to counter the recent flattening of the yield curve.

The 10-year/30-year JGB yield spread reached its widest since December 2016 on Tuesday before tightening slightly on Thursday.

The JGB yield curve has flattened steadily, led by declines in super-long bond yields. The 30-year JGB yield fell to a 1-1/2-year low of 0.665 percent earlier in July amid risk aversion in the broader markets triggered by trade conflict concerns. ($1 = 112.7400 yen) (Reporting by the Tokyo markets team; Editing by Subhranshu Sahu)

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