Bonds fall slightly, with weak results from the Bank of Japan’s buying operations; there is also a sense of caution over the weekend’s decision meeting – Bloomberg

Bond prices fell slightly on the 24th. Buying followed the previous day’s trend in which US interest rates fell, mainly on medium-term bonds, but selling became predominant as the Bank of Japan’s government bond purchase operations yielded weak results. A sense of caution over the weekend’s Bank of Japan monetary policy meeting also weighed on the market.

Keisuke Tsuruta, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities, pointed out that bonds with 25 years or more remaining to maturity have weakened due to weak operations. He also expressed the view that until the results of the Bank of Japan’s decision meeting this weekend are released, the market will continue to lack a sense of direction and continue to have a heavy topside.

In its morning monetary operations, the Bank of Japan conducted purchase operations targeting inflation-indexed bonds with remaining maturities of over 3 years and up to 5 years, over 5 years and up to 10 years, over 10 years and up to 25 years, and over 25 years. notification. Both purchase amounts remained unchanged. According to the operation results, the bidding ratio for bonds with over 25 years left to maturity was 2.53 times, a slight increase from the previous time.

The yield on newly issued 10-year bonds temporarily rose one basis point (bp) to 0.89%, the highest level since November last year. The yield on newly issued 40-year government bonds rose to the 2.3% level for the first time since 2011.

Newly issued government bond yield (as of 3pm)

At the Bank of Japan’s monetary policy meeting to be held on the 25th and 26th, all eyes are on whether there will be any revisions to future purchases of long-term government bonds. There are also speculations that the bank will delete a footnote in the March meeting statement that stated that the current amount of purchases was approximately 6 trillion yen per month.

Amane Yamashita, chief economist at the Fund Management Department of the National Federation of Credit Cooperatives, said in a statement that he does not expect government bond purchases to be reduced immediately starting in May, but since they are not “the main means of financial market regulation,” He points out that it is unclear whether it will be handled. He said, “Even if it is revised, if there is a proper explanation, the uncertainty will be alleviated, so it may not be such a strong selling point.”

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