MNI POLICY: BOJ Cuts Longer-End JGB Buy; Ups Short-End JGB Buy

     TOKYO (MNI) - The Bank of Japan Wednesday lowered the scale of its

purchases of Japanese government bonds with a remaining life of 3 to 5 years and

10 to 25 years, while increasing the scale of its purchases of JGBs with a

remaining life of 1 to 3 years.

     The BOJ offered to buy Y380 billion of 3 to 5 year JGBs, down from Y400

billion at the similar operation on June 26. The scale of its purchase of 10 to

25 year JGBs was also reduced to Y180 billion from Y200 billion at the similar

operation last Friday.

     Meanwhile, the scale of its purchase of JGBs with a remaining life of 1 to

3 years was raised to Y380 billion from Y350 billion on June 26.

     The BOJ decisions are based on recent low bid-to-cover ratios at the JGB

buying operations of 3 to 5 years and of 10 to 25 years, increasing the scale of

its purchases of of 1 to 3 year JGBs due to the recent high bid-to-cover ratios.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MMJBJ$,M$A$$$,M$J$$$,M$$FI$,MN$FI$]