January 31, 2013 / 2:55 AM / 5 years ago

JGBs firm, bolstered by month-end extension buying

TOKYO, Jan 31 (Reuters) - Japanese government bonds gained
on Thursday, lifted by month-end duration extension buying.
    * Some funds often buy longer-dated bonds at the end of a
month, to extend their portfolio's duration to match the index.
    * "It's the end of the month, so there's extension buying,"
said Tomohiro Miyasaka, an analyst at Credit Suisse in Tokyo.
    "The U.S. Treasuries market was also relieved that FOMC will
continue its policies for while," he said.
    * The U.S. Federal Reserve said in a statement after its
two-day policy meeting ended on Wednesday that it will continue
its current economic stimulus programs, buying mortgage and U.S.
government debt, until the labour market improves
    * The 10-year JGB yield slipped 2.5 basis
points to 0.750 percent, back toward last week's six-week low of
0.720 percent.   
    * The 10-year JGB futures contract ended morning
trade up 0.21 point at 144.26, a few ticks from its session
    * The 20-year yield fell half a basis point
to 1.780 percent, and the 30-year bond yield lost
1 basis point to 1.995 percent.
    * The Ministry of Finance on Thursday offered 2.7 trillion
yen with a coupon of 0.10 percent, matching that of the past 13
sales as well as the interest the Bank of Japan pays on its
current account excess reserves. 
    The auction was expected to proceed smoothly as the central
bank buys much of the issuance of that maturity through its
asset purchase programme.
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