MNI BRIEF: BOJ JGB Buying Continues; Market Speculation Intact

The Bank of Japan continues to buy bonds Monday, as it attempts to quell speculation it is again set to tweak its yield curve control at this week's policy meeting. The BOJ on Monday conducted extraordinary bond buying operations, in addition to its unlimited purchases of JGBs with a remaining life of 5 to 10 years at a fixed-rate of 0.50% and 2-year bonds at 0.030%.

The 10-year JGB yield closed at 0.505% after rising to 0.510%, but below Friday’s intraday high of 0.545%, but above an upper limit of the BOJ's perceived tolerated range.

The BOJ Monday bought a total of JPY2.1 trillion of JGBs to curb higher bond yields. On Friday, when the 10-year bond yield spiked higher, the BOJ bought a total of about JPY5 trillion JGBs -- a second successive record high total after Thursday's JPY4.6 trillion. Bank officials have wanted to see how December's range shift played out, but the BOJ has been under pressure to act again amid ongoing selling by non-Japanese players.

The pressures are greater, as the central bank is hoping to conduct bond-buying without signaling any shift from its easy policy stance. (MNI POLICY: BOJ Eyes Maturities As Yield Pressure Persists)