Demand for 20-year securities pushed yields to the lowest since October after lingering concerns over emerging markets bolstered demand for U.S. Treasuries last week. The Bank of Japan bought 310 billion yen ($3 billion) in government notes from the market today in its first operation this month. The Ministry of Finance will auction 2.4 trillion yen of 10-year notes tomorrow.
“Buying is going to prevail in the bond market amid risk-off sentiment,” said Kazuya Ito, the head of fixed income in Tokyo at Daiwa SB Investments Ltd., which oversees the equivalent of $48 billion. “Tomorrow’s auction of 10-year notes may not be bad.”
Japan’s 10-year bond yield fell 1/2 basis point to 0.615 percent as of 1:58 p.m. in Tokyo after touching 0.605 percent, the lowest since Dec. 2, according to Japan Bond Trading Co. Twenty-year yields slipped one basis point to 1.445 percent after declining to as low as 1.44 percent, a level unseen since Oct. 24.
Lead 10-year bond futures were little changed at 144.77 as the Topix index of Japanese shares slid 1.5 percent.
The BOJ today offered to buy 200 billion yen of government notes maturing in more than 10 years and 110 billion yen of debt due in a year or less.
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