TOKYO (MNI) – The Bank of Japan on Monday announced to buy an unlimited amount of Japanese government bonds with a remaining life of 5 to 10 years at a fixed-rate of 0.110%, indicating that the BOJ is trying to keep its 10-year bond yield target “around zero percent.”
The 10-year bond yield traded at 0.090% early on Monday, up 6 basis points from Friday’s close, in light of speculation that the BOJ may consider changing the current policy framework at its July 30-31 meeting to ease the side-effects prolonged large-scale easing.
After the operation, the 10-year bonds traded at 0.075%. It was already in a process of falling after hitting 0.090%.
The BOJ’s fixed-rate bond buying operation is the first since Feb. 2, when it conducted a similar operation at 0.110%.
Under the yield curve control framework, the BOJ is seeking to stabilize the 10-year government bond yield, the benchmark for long-term borrowing costs, at around zero percent and keep the overnight interest rate at -0.1%.
–MNI Tokyo Bureau; tel: +81 90-4670-5309; email: [email protected]
Source: MNI