MNI POLICY: BOJ Ups Scale Of 1-3 And 3-5 Year JGB Buying Ops

     TOKYO (MNI) - The Bank of Japan Tuesday conducted purchases of Japanese

government bonds with remaining maturities of 1 to 3 years and 3 to 5 years,

increasing the size over the previous comparable operations.

     Purchases of JGBs in the 1 to 3 year basket were increased to Y300 billion

from Y250 billion on Aug 31, while purchases in the 3 to 5 year sector increased

to Y350 billion from the Y300 billion seen on the same day.

     The increased purchases in the shorter maturity ranges, expected by some

bond market participants, were based on the outline of outright JGB purchases

released by the BOJ on Friday.

     The BOJ has said it decided to reduce the frequency of its purchases of

JGBs with a remaining life of 1 to 10 years in September, although it raised the

upper end of the buying range.

     The decision was based on there being fewer business days in September

compared with August and reflected the BOJ's stance to conduct bond buying

operations in a flexible manner.

     The number of bond buying operations with a remaining life of 1 to 3 years,

3 to 5 years and 5 to 10 years was reduced to five times in September for each

bucket, down from six in August. However, the upper end of their buying range

for each operation was increased by Y100 billion to Y400 billion for 1 to 3

years, Y450 billion for 3 to 5 years and to Y600 billion for 5 to 10 years.

--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

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