The Bank of Japan (BoJ) surprised the market Friday by increasing its buying in 5-10 year bonds, trying to keep the 10-year JGB yields near zero. This move comes after the central bank unexpectedly skipped widely anticipated bond-buying operations in shorter maturities, which and pushed JGB yields higher.
Following this news, the Japanese government bonds climbed steadily after the Bank of Japan (BoJ) surprised markets, by unveiling its bond-buying plans, wherein it raised the purchase operation of long-term bonds.
The benchmark 10-year bond yield, which moves inversely to its price, hovered around 0.08 percent, while the long-term 30-year bond yields fell 1/2 basis point to 0.85 percent and the yield on the short-term 3-year note also dipped 1/2 basis point to -0.14 percent by 06:20 GMT.
The central bank, in its latest JGB buying operation plans, has raised the purchase of long-term 5-10 years maturity bonds to JPY450 billion, from JPY410 billion, while keeping other short-to-medium-term maturity bonds unchanged for purchases.
Markets now wait to watch the decision of the BoJ at its 2-day monetary policy meeting, scheduled to be held on January 30-31. We foresee that the central bank will remain committed to holding its 10-year JGB yields near zero, while keeping interest rate steady at -0.10 percent.


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