HALISTER1: JGB 10-Year Rate Near 0.10% May Spur Fixed-Rate Buys: SMBC Nikko

JGB 10-Year Rate Near 0.10% May Spur Fixed-Rate Buys: SMBC Nikko

(Bloomberg) -- BOJ could deliver fixed-rate bond-purchase operation if the 10-year JGB yield approaches 0.05%-0.10% area, according to SMBC Nikko Securities.
  • Hurdle of conducting fixed-rate operation seems lower than investors previously thought, making it hard to sell 10-year notes from current level, Souichi Takeyama, a rates strategist in Tokyo, says
  • Mid-term zone of the curve is steady after BOJ conducted first fixed-rate bond-buying operation last week
  • Yields on super-long notes advance as this is the zone where investors don’t expect fixed-rate operation anytime soon
  • There was buying interest in JGBs earlier this morning on speculation the BOJ will increase amount of bond purchases or conduct fixed-rate operation
    • But yields rose after normal size of operation; trading volume was thin, which makes direction from here uncertain
  • Yield on 10-year securities steady at 0.030% while that on 30-year debt rises 2.5bps to 0.615%, highest since March
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Souichi Takeyama (SMBC Nikko Securities Inc)

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