BOJ Offers to Buy JGBs Unlimitedly Third Time in July

July 30, 2018

Tokyo- The Bank of Japan offered to buy an unlimited amount of Japanese government bonds at a fixed yield Monday to tame a rise in long-term interest rates.

This marked the central bank's third fixed-yield, unlimited JGB buying this month. It is the first time that such an operation has been conducted as many as three times in a month.

The BOJ offered to buy JGBs with five to 10 years remaining to maturity at a fixed yield of 0.100 pct unlimitedly, after the benchmark 10-year JGB yield rose to 0.110 pct in Tokyo interbank trading, the highest level since Feb. 3 last year.

The benchmark yield fell back following the BOJ's operation. In late trading, the yield was at 0.095 pct, down 0.005 percentage point from late Friday.

The BOJ bought some 1.64 trillion yen of JGBs in Monday's operation, the largest since the bank introduced fixed-yield, unlimited JGB buying in September 2016.

In its previous purchase on Friday, the BOJ changed the yield level to 0.100 pct from 0.110 pct, in an apparent show of flexibility in its efforts to guide 10-year JGB yields around zero pct.

JGB yields have been under upward pressure in recent sessions amid speculation that the BOJ will show tolerance for slightly higher yield levels.

The BOJ is scheduled to end its two-day policy meeting on Tuesday. Jiji Press