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REPEAT: MNI POLICY: BOJ Stands Ready To Cut JGB Buying Further

Repeats Story Initially Transmitted at 05:34 GMT Jul 19/01:34 EST Jul 19
     TOKYO (MNI) - The Bank of Japan stands ready to further reduce the scale of
its purchases of Japanese government bonds amid falling bond yields, in order to
keep an "appropriate yield curve" for guiding low inflation to its 2% price
stability target.
     On Thursday, the BOJ lowered the size of its purchase of JGBs with a
remaining life of 10 to 25 years to Y180 billion from Y190 billion in a similar
operation Friday. It also cut the purchase amount of JGBs with a remaining life
of 25 years to Y60 billion from Y70 billion.
     Thursday's cut in the purchase amount for the 10 to 25 year zone was the
first since January 29 and the cut in JGBs with a remaining life of more than 25
years was the first since February 28.
     The BOJ's decision to lower the scale of JGB buying was partly expected by
investors following the recent declines in super long-term bond yields.
     On Thursday, the BOJ left the scale of its purchases of JGBs with a
remaining life of 5 to 10 years unchanged at Y410 billion but the BOJ stands
ready to lower the scale from Y410 billion if necessary amid tight bond
supply-demand conditions.
     BOJ officials are always paying attention to the risk that the reduction of
JGB buying may cause the yen to appreciate and domestic stock prices to fall but
the yen has been gradually depreciating against the dollar in recent trading.
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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