BOJ Leaves Unchanged JGB Buying Frequency in August

--Also Leaves Unchanged Buying Plans for Each JGB Maturity Zone

     TOKYO (MNI) - The Bank of Japan said Monday it has decided to leave the

frequency of its Japanese government bond purchases in August unchanged from

July, indicating there is no need to guide any particular bond yields higher or

lower.

     The BOJ also left unchanged its purchase plans for each JGB maturity zone.

     The market focus was on whether the BOJ would change the per-auction size

for JGBs with a remaining life of 5 to 10 year from a range of Y350 billion to

Y550 billion planned for July.

     On July 24, the bank reduced its buying of the zone to Y470 billion from

Y500 billion in the previous similar operation on July 18 as the 10-year JGB

yield remained stable.

     Earlier on July 7, it increased the scale of its purchases of JGBs with a

remaining life of 5 to 10 years to Y500 billion from Y450 billion in a similar

operation on July 5 in order to stop JGB yields from rising fast. It also

conducted a fixed-rate bond buying operation for the first time since Feb. 3.

     At the time, the 10-year bond yield rose to 0.105% for the highest level

since Feb. 3.

     Under its yield curve control policy framework, the BOJ is seeking to

stabilize the 10-year government bond yield, the benchmark for long-term

borrowing costs, "around zero percent" and keep the overnight interest rate at

-0.1%.

     The BOJ also said Monday that it may announce additional JGB buying

operations, depending on market conditions.

     The BOJ refrains from conducting JGB buying operations on days when the

Ministry of Finance auctions JGBs and the BOJ board holds policy meetings.

     The planned JGB purchase operations in August:

     The zones (amounts to be purchased in ranges)

     1 to 3 years (Y200-Y300 bln in Aug vs. Y200-Y300 bln in July)

     3 to 5 years (Y250-Y350 bln in Aug vs. Y250-Y350 bln in July)

     5 to 10 years (Y350-Y550 bln in Aug vs. Y350-Y550 bln in July)

     10 to 25 years (Y150-Y250 bln in Aug vs. Y150-250 bln in July)

     More than 25 years (Y50-Y150 bln in July vs. Y50-Y150 bln in June)

     The frequencies of operations in each zone in August (vs. plans and actuals

in July)

     1 to 3 years: 6 times (6 times)

     3 to 5 years: 6 times (6 times)

     5 to 10 years: 6 times (6 times)

     10 to 25 years: 5 times (5 times)

     More than 25 years: 5 times (5 times)

     The dates of operations

     Aug 2: 1 to 3 years, 3 to 5 years, 5 to 10 years.

     Aug 4: 1 to 3 years, 3 to 5 years, 10 to 25 years, more than 25 years.

     Aug 9: 5 to 10 years, 10 to 25 years, more than 25 years.

     Aug 10: 1 to 3 years, 3 to 5 years.

     Aug 16: 5 to 10 years, 10 to 25 years, more than 25 years.

     Aug 18: 1 to 3 years, 3 to 5 years, 5 to 10 years.

     Aug 23: 1 to 3 years, 3 to 5 years, 10 to 25 years, more than 25 years.

     Aug 25: 5 to 10 years.

     Aug 28: 1 to 3 years, 3 to 5 years.

     Aug 30: 5 to 10 years, 10 to 25 years, more than 25 years.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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