The Bank of Japan (BoJ) cut purchases of bonds maturing in five to 10 years by ¥30bn ($271mn) at its regular debt-buying operations last week.
The central bank offered to buy ¥440bn of the securities, down from ¥470bn at the previous operation on August 9.
This is the first reduction for the 5-to-10-year maturity zone since July 24, when the BoJ cut the amount from ¥500bn.
The benchmark 10-year bond yield dropped 1/2 basis point to 0.040%, the lowest since June 7. It fell below 0.050% last week for the first time since June 27. The yen was little changed at 110.63 per dollar, after sliding 1.3% over the last two days.
“The main reason is the 10-year yield falling below 0.05%, but the yen weakening has also helped,” said Souichi Takeyama, a rates strategist at SMBC Nikko Securities Inc in Tokyo “The BoJ may have cut when it can, given the prospect of tightening supply/demand balance in the future.”
The BoJ maintained purchase volume unchanged for other sectors from its previous operations. It offered to buy ¥200bn of 10-to-25 year bonds, and ¥100bn of securities due in more than 25 years.
Australia’s sale of April 2029 government bonds met subdued demand as the offered amount increased about 13% to A$900mn ($706mn) from the last auction on July 5. The coverage ratio dropped to 2.96, lowest since February 8, from 4.47. The cut-off yield rose to 2.7625% from 2.7200%.
This debt isn’t included in any baskets that underlie bond futures.
Men walk towards the Bank of Japan building in Tokyo. The BoJ cut purchases of bonds maturing in five to 10 years by $271mn at its regular debt-buying operations last week.
