JGBs rangebound as investors await Fed, BOJ

Reuters

TOKYO, Oct 30 (IFR) - Japanese government bond prices endedthe morning session steady to slightly higher on Wednesday, withthe 7-year through 20-year curve steepening by 1 basis pointfrom the previous session.

In the morning session, the benchmark 10-year JGB yield continued to fluctuate in a very narrow range of0.60 percent to 0.605 percent, while the current 20-yr JGBsrecovered most of their earlier losses into the morning close,sending their yield down from 1.505 percent to1.495 percent, or flat with the previous close.

Several regional banks sold 5-year to 10-year JGBs to takeprofits after one large savings bank sold 10-year JGBs onTuesday. But other large domestic institutional investors stayedlargely sidelined ahead of the U.S. Federal Reserve's policyannouncement later on Wednesday and the Bank of Japan's meetingon Thursday.

As widely expected, the BOJ offered to buy a total of 1trillion yen ($10.19 billion) of 1-year to 10-year JGBs in threetranches under its JGB buying program.

The central bank purchased 400 billion yen of JGBs maturingin five to 10 years, 350 billion yen of JGBs maturing in threeto five years, and 250 billion yen of JGBs maturing in one tothree years.

One fund manager at a domestic mutual fund told IFR Tokyothis morning that he expects the benchmark 10-year JGB yield tohover around 0.60 percent for a while, as the 10-year yieldstayed in a narrow 0.550 percent to 0.620 percent range fromApril 10 through May 9 in consolidation mode.

At midday, yields on the current 10-year JGBs were down 0.5basis point from Tuesday at 0.600 percent. The 5-year notes andthe 30-year bonds were not traded actively among brokers.

Lead December JGB futures ended midday at theirintraday high of 145.05, up 0.13 point from Tuesday, afterhitting an intraday low of 144.93.

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