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BOJ cuts JGB purchases over 5 years and 10 years to 450 billion yen-Bloomberg

Pedestrians walk past Bank of Japan (BOJ) headquarters in Tokyo, Japan, Monday, July 8, 2019. Governor Haruhiko Kuroda said extremely low interest rates will be held in place until at least around next spring, while the bank will keep an eye on with about risks of price momentum.

Photographer: Akio Kon / Bloomberg

On the 16th, the Bank of Japan reduced JGB purchase transactions over a remaining period of more than 5 years and less than 10 years. The long-term interest rate is expected to ease supply and demand in the 10-year zone, such as buying long-term interest rates at the lowest level in three years.

Bank of Japan JGB Purchase Transaction on 16th (Amount is 100 Million Yen)

review Amount Last operation Comparison
5-10 years 4500 4800 ▲ 300

In the bond market, the yield of recently issued 10-year JGBs, which is an indicator of long-term interest rates, fell to levels since July 2016 and fell temporarily to minus 0.255% following the announcement of the Bank of Japan's operation at 1 p.m. 10:10.

BNP Paribas Securities Yusuke Igawa Bond Strategist pointed out in the report that even if the long-term interest rate is minus 0.25%, if it is only reduced by several tens of billions of yen, the interest rate is expected to fall further.

Click here for articles on long-term interest rates.

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