HALISTER1: BOJ Buying Lifts Japan Bonds, Led by Super-Longs: Deutsche

BOJ Buying Lifts Japan Bonds, Led by Super-Longs: Deutsche

(Bloomberg) -- JGBs rising after strong result of BOJ’s super-long bond purchases, especially maturities of exceeding 25 years, says Makoto Yamashita, chief interest rate strategist at Deutsche Securities.
  • Result of bond purchases suggest domestic investors may be reluctant to reduce JGB holdings amid concern over result of BOJ policy action, says Tokyo-based Yamashita by phone today
  • Market participants likely holding onto steepening positions as BOJ seen wanting a steeper JGB yield curve
  • If BOJ deepens negative interest rate policy, short-term yields may decline
  • NOTE: BOJ’s offer to buy maturities of more than 25 year drew selling interest worth 2.12 times amount the central bank intended to buy vs 2.21 at previous operation on Sept. 14
  • 10-year yield falls 1.5 bps to -0.060%, 20-year yield declines 4 bps to 0.405% and 30-year yield slides 4 bps to 0.510%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Makoto Yamashita (Deutsche Bank AG)

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