Japan’s 10-Year Bonds Decline on Results of BOJ Debt Operation

Japan’s 10-year government bonds fell for a fourth day this week after results of the central bank’s operation to buy debt damped demand for the securities.

Bond futures had their biggest drop in a week after the Bank of Japan offered to purchase a total of 2.51 trillion yen ($25.3 billion) in short- to long-term securities. Investor bids today to sell debt with more than five years to maturity increased from the BOJ’s operation on April 8.

The results “were weak for the 5- to 10-year maturities and the 1- to 10-year tenors,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which manages the equivalent of $107 billion.

Benchmark 10-year yields rose six basis points to 0.635 percent as of 4:24 p.m. in Tokyo from yesterday, according to Japan Bond Trading Co., the nation’s largest interdealer debt broker. Yields touched a record low of 0.315 percent on April 5.

Five-year rates gained six basis points to 0.255 percent, while two-year yields were little changed at 0.125 percent.

Thirty-year yields rose 3 1/2 basis points to 1.555 percent and 20-year rates climbed three basis points to 1.455 percent.

Ten-year bond futures slid 1.00 to 143.73 in Tokyo.

At his first policy meeting, BOJ Governor Haruhiko Kuroda pledged last week to double the monetary base in two years by buying about 7.5 trillion yen of bonds a month, equivalent to about 70 percent of new government debt issuances.

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