MNI POLICY: BOJ Cuts Scale of long-, Super Long-Term JGB Buys

     TOKYO (MNI) - The Bank of Japan Friday reduced the scale of its purchases

of long- and super long-term Japanese government bonds to curb a further drop in

bond yields.

     The scale of its purchases of JGBs with a remaining life of 5 to 10 years

was reduced to Y380 billion from Y400 billion at the previous similar operation

on Sept. 12.

     The size of its purchases of JGBs with a remaining life of 10 to 25 years

and more than 25 years was also reduced to Y120 billion (vs. Y140 billion on

Sept. 12) and to Y30 billion (vs. Y40 billion on Sept. 12).

     The BOJ's decisions were expected by some bond players following BOJ

Governor Haruhiko Kuroda comments Thursday that it's desirable for yield curve

to steepen slightly.

     He also said that the BOJ would tolerate lower JGB yields if the fall was

in line with a drop in overseas bond yields.

--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$]