JGBs remain unresponsive to BoJ’s monetary policy decision; central bank pledges to buy bonds at current pace

The Japanese government bonds remained unresponsive to the Bank of Japan’s (BoJ) two-day monetary policy meeting, concluded early today, where its kept its short-term interest rate target unchanged at -0.1 percent. It also pledged to continue buying JGBs at more or less the same pace as currently, in a bid to increase its holdings at an annual pace of around JPY80 trillion.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note rose 1 basis point to 0.76 percent and the yield on short-term 2-year traded flat at -0.15 percent by 04:30 GMT.

The Bank of Japan stayed the course with its monetary stimulus on Friday at Governor Haruhiko Kuroda’s final policy meeting before his new term begins next month. The central bank kept its yield-curve control settings and asset purchases unchanged, a result forecast by all economists surveyed by Bloomberg.

With inflation still far from the BoJ’s 2 percent target, Kuroda made it clear during parliamentary confirmation hearings this week that "powerful monetary easing” is here for a while. The two new deputy governors who are set to join the board later this month also endorsed continued monetary easing.

Meanwhile, the Nikkei 225 index traded 0.40 percent higher at 21,454.50 by 04:30 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bearish at -105.66 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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