JGBs trade narrowly mixed as BoJ keeps bond purchases unchanged; 30-year auction closely eyed

Japanese government bonds traded narrowly mixed on Wednesday after the Bank of Japan kept its bond purchases unchanged in its open market operation held today.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.082 percent, the yield on the long-term 30-year note dipped nearly 1/2 basis point to 0.832 percent and the yield on short-term 2-year rose 1/2 basis point to -0.130 percent by 04:55 GMT.

The BoJ bought JPY50 billion up to 1-year JGBs in today's operation, JPY250 billion worth of bonds of 1-3 years of maturity and JPY300 billion worth of bonds of 3-5 years of maturity.

Moreover, Bank of Japan Governor Haruhiko Kuroda in its latest speech reiterated the central bank’s resolve to maintain quantitative easing, but his positive comments on inflation and the economy sent the yen to a four-month high versus the dollar. Kuroda also added that the BoJ will continue its aggressive easing, composed of yield curve control and a massive asset-buying program, for as long as needed to achieve its price target.

Looking ahead, Markets will now focus on the 30-year bond auction, which is scheduled to held on Thursday at 03:45GMT. Yield fluctuations should be monitored closely at the action as it an indicator of the government debt situation.

Meanwhile, the Nikkei 225 index traded 0.46 percent lower at 23,837.50 by 05:05 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained slightly bearish at -78.58 (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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