MNI BRIEF: BOJ, As Planned, Offers Unlimited JGB Buys At 0.25%

The Bank of Japan on Monday conducted an unlimited purchase of Japanese government bonds with a remaining life of 5 to 10 years at a fixed-rate of 0.25%, an upper target set by the bank.

The operation is aimed at curbing higher 10-year JGB yields following the rise to 0.230% on Thursday, close to an upper end of between around plus and minus 0.25% that the BOJ has set. The 10-year JGB bonds traded at 0.210% in early Monday trade, down from Friday’s close of 0.225%.

There is the possibility that market players will not take part in the operation as the BOJ will buy bonds below market price. The operation is the first time since July 2018 and the BOJ on Thursday said that the bank will conduct an unlimited bond buying operation at 0.25%.

Under the yield curve policy, the BOJ is managing bond purchases to keep the 10-year bond yield at around zero percent.