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REPEAT: MNI: BOJ Mulls Gap Between 10-Year JGB Op and Auction

MNI (London)
Repeats Story Initially Transmitted at 04:55 GMT May 17/00:55 EST May 17
By Hiroshi Inoue
     TOKYO (MNI) - The Bank of Japan is considering an extended time gap between
its policy enforcing 5-to-10-year JGB purchases and the regular scheduled
Ministry of Finance auctions of the benchmark 10-year bond to boost market
pricing and functioning, MNI understands.
     The central bank currently conducts bond purchases the day after the
auction but is considering delaying the operation by up to a couple of days to
allow better price formation.
     Officials want any decision to avoid unnecessary noise in the bond market
and will discuss the issue with JGB dealers at the next scheduled meeting on
June 10-11, although they could announce a preliminary decision as early as May
31 when they outline their purchase program for June.
     At present, the bank conducts its purchases of super long-term bonds three
business days after their auctions.
     --NO FREQUENCY CUT
     It is unlikely the BOJ will reduce the frequency of its each JGB buying
operation from the current four times monthly, but it will do so if market
conditions warrant - as they did when trimming purchases from five times a
month.
     The BOJ will continue to conduct its purchases flexibly to achieve control
over the yield curve, allowing the amount outstanding to increase at an annual
pace of up to Y80 trillion - although at present, market conditions have allowed
the bank to slow purchases to Y30 trillion annually.
--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
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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