REPEAT: MNI POLICY: BOJ Keeping 10-Yr Yield in Fixed-Rate Op

Repeats Story Initially Transmitted at 05:34 GMT Jul 23/01:34 EST Jul 23

     TOKYO (MNI) - The Bank of Japan on Monday announced to buy an unlimited

amount of Japanese government bonds with a remaining life of 5 to 10 years at a

fixed-rate of 0.110%, indicating that the BOJ is trying to keep its 10-year bond

yield target "around zero percent."

     The 10-year bond yield traded at 0.090% early on Monday, up 6 basis points

from Friday's close, in light of speculation that the BOJ may consider changing

the current policy framework at its July 30-31 meeting to ease the side-effects

prolonged large-scale easing.

     After the operation, the 10-year bonds traded at 0.075%. It was already in

a process of falling after hitting 0.090%.

     The BOJ's fixed-rate bond buying operation is the first since Feb. 2, when

it conducted a similar operation at 0.110%.

     Under the yield curve control framework, the BOJ is seeking to stabilize

the 10-year government bond yield, the benchmark for long-term borrowing costs,

at around zero percent and keep the overnight interest rate at -0.1%.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com