JGBs track lower U.S. Treasuries as BOJ buying supports
TOKYO, Sept 18 (IFR) - Japanese government bond prices dipped on Thursday on the back of a relatively sharp rise in U.S. Treasury yields and the dollar overnight after the U.S. Federal Reserve stuck to its easy monetary stance.
Federal Reserve officials did little to change the outlook for a long slow climb back up to normal monetary policy.
Yields on the current 5-year U.S. Treasury note climbed to their highest level since Sept 6 last year. The dollar rose as high as 108.69 yen in early trading on Thursday, its highest level since Sept 8, 2008.
Bank of Japan purchases kept JGB yields in a narrow range.
The BOJ offered to buy 400 billion yen ($3.68 billion US dollar) of JGBs in the 5-year to 10-year zone, 100 billion yen in the 10-year to 25-year zone, and 30 billion yen in the 25-year to 40-year zone under its massive JGB purchase program, as widely expected.
The BOJ purchased JGBs in the same zones and amounts on July 17, July 24, Aug 6, Aug 27, and Sept 10.
In the morning session, a few regional banks and prefectural cooperative banks bought 5-year to 9-year JGBs on dips, while some investors sold 15-year to 16-year JGBs sporadically in relatively thin activity.
At midday, the yield on the current 5-yer JGB was up 0.5 basis point at 0.180 percent, while the 10-year yield was up 1 basis point at 0.560 percent.
In the superlong zone, the yield on the new 20-year JGBs (issue number 150) added 0.5 basis point to 1.410 percent , compared with the average accepted yield of 1.435 percent in the previous session's 20-year auction. The 30-year yield rose 1 basis point to 1.685 percent .
Lead 10-year December JGB futures moved in a narrow range of 145.44 to 145.54 in the morning session before finishing down 0.08 point at 145.53 at midday.
The JGB market largely shrugged off Japanese trade data released earlier in the session that showed the country's exports declined in August as shipments to the United States contracted.
(1 US dollar = 108.5500 Japanese yen) (Reporting by Masatsugu Hisatsune; Editing by Kim Coghill)