MNI POLICY: BOJ Ups Upper End of July Key Long-Term JGB Buys

--BOJ Ups Upper End of Short-, Medium-Term JGB Buying, Keeps Ops Frequency

     TOKYO (MNI) - The Bank of Japan said Tuesday it will increase the upper end

of its short-, medium- and long-term government bond buying operations in July

but left the frequency of all bond buying operations unchanged.

     The upper end of short-term JGB buying operations was increased to JPY600

billion in July from JPY500 billion and the upper end of medium-term bond buying

was also increased to JPY500 billion from JPY450 billion in June.

     Also, the upper end of long-term bond buying was increased to JPY600

billion in July from JPY550 billion in June. The BOJ's decisions are aimed at

curbing the possibility of higher JGB yields on increased JGB issuance by the

Ministry of Finance.

     The MOF has announced to increase the issuance of government bonds worth

JPY59.5 trillion to finance a second supplementary budget. The BOJ has said that

the bank would act flexibly, taking account of market conditions, aiming to

achieve the target level of a long-term interest rate specified by the guideline

for market operations.

     Depending on conditions, purchase size per auction could be set at a fixed

or unlimited amount, the BOJ added.

     The BOJ's schedule sees it refrain from conducting operations on

days when the Ministry of Finance holds auctions for JGBs or the Bank's board

holds policy meetings.

     --CALENDAR

     The planned JGB purchase operations in July:

     The zones (amounts to be purchased in ranges)

     --1 to 3 years (JPY250-JPY600 bln in July vs. JPY200-JPY500 bln in June)

     --3 to 5 years (JPY200-JPY500 bln in July vs. JPY200-JPY450 bln in June)

     --5 to 10 years (JPY250-JPY600 bln in July vs. JPY250-JPY550 bln in June)

     --10 to 25 years (JPY50-JPY200 bln in July vs. JPY50-JPY200 bln in June)

     --More than 25 years (zero-JPY50 bln in July vs. zero-JPY50 bln in June)

     The frequencies of operations in each zone in July plans vs June actual.

     --1 to 3 years: 6 times (6 times)

     --3 to 5 years: 6 times (6 times)

     --5 to 10 years: 5 times (5 times)

     --10 to 25 years: 2 times (2 times)

     --More than 25 years: 2 times (2 times)

     The dates of operations

     July 1: 3 to 5 years.

     July 3: 1 to 3 years, 3 to 5 years, 10 to 25 years.

     July 6: 5 to 10 years.

     July 8: 1 to 3 years, 3 to 5 years.

     July 10: 1 to 3 years, 5 to 10 years, more than 25 years.

     July 17: 1 to 3 years, 3 to 5 years, 5 to 10 years.

     July 22: 1 to 3 years, 3 to 5 years, 5 to 10 years.

     July 27: 10 to 25 years.

     July 29: 1 to 3 years, 3 to 5 years.

     July 31: 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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