MNI POLICY: BOJ Cuts Scale of Longer-End JGB Buying Operations

     TOKYO (MNI) - The Bank of Japan on Friday unexpectedly reduced the scale of

its purchases of longer-end Japanese government bonds.

     - The BOJ Friday lowered its purchases of JGBs with a remaining life of 10

to 25 years to Y160 billion from Y180 billion. The reduction was the first since

Feb 12 when the BOJ lowered the scale to Y180 billion from Y200 billion.

     - The amount of purchase of JGBs with a remaining life of more than 25

years was lowered to Y40 billion from Y50 billion. That cut was the first since

Sept 21 2018 when the BOJ lowered the scale of Y50 billion from Y60 billion.

     - The reduction weren't expected by JGB players and the operations

increased upward pressure on bond yields. The yield on 10-year bonds rose to

-0.025% at midday, up 0.5 basis point from Thursday's close. The yields on 20-

and 40-year bonds rose to 0.395% and 0.615% at midday, up 1.5 basis point and

3.5 basis points from Thursday's close, respectively.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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