MNI BRIEF: Japan 10-Yr JGB Yield Hits 0.562%; Above BOJ Range

The yield on the 10-year Japanese government bonds rose as high as 0.560% in Friday trade, above the upper limit of the Bank of Japan’s recently amended target range of around -0.5% and +0.5%, before falling back to trade around 0.52%.

The rise in yields was caused by persistent speculation that the BOJ may tweak monetary policy at the January 17-18 meeting, as distortion of financial markets continued despite the December decision (MNI POLICY: BOJ Eyes Maturities As Yield Pressure Persists), BOJ officials are examining how the December policy tweak has impacted the yield curve formation.

To address the spoke in bonds Friday, the BOJ offered to broadly buy JGBs via extraordinary and fixed-rate bond buying operations of medium-term bonds, along with regular fixed-rate buying of long-term bonds.On Thursday, the BOJ bought JPY4.6 trillion JGBs, its largest bond buying day on record.