(MENAFN- Gulf Times) The Bank of Japan (BoJ) cut purchases of bonds maturing in five to 10 years by ¥30bn ($271mn) at its regular debt-buying operations last week.
The central bank offered to buy ¥440bn of the securities, down from ¥470bn at the previous operation on August 9.
This is the first reduction for the 5-to-10-year maturity zone since July 24, when the BoJ cut the amount from ¥500bn.
The benchmark 10-year bond yield dropped 1/2 basis point to 0.040%, the lowest since June 7. It fell below 0.050% last week for the first time since June 27. The yen was little changed at 110.63 per dollar, after sliding 1.3% over the last two days.
'The main reason is the 10-year yield falling below 0.05%, but the yen weakening has also helped, said Souichi Takeyama, a rates strategist at SMBC Nikko Securities Inc in Tokyo 'The BoJ may have cut when it can, given the prospect of tightening supply/demand balance in the future.
The BoJ maintained purchase volume unchanged for other sectors from its previous operations. It offered to buy ¥200bn of 10-to-25 year bonds, and ¥100bn of securities due in more than 25 years.
Australia's sale of April 2029 government bonds met subdued demand as the offered amount increased about 13% to A$900mn ($706mn) from the last auction on July 5. The coverage ratio dropped to 2.96, lowest since February 8, from 4.47. The cut-off yield rose to 2.7625% from 2.7200%.
This debt isn't included in any baskets that underlie bond futures.
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