Japan govt bonds edge down ahead of holiday

Japanese government bonds ( JGBs) edged down on Tuesday ahead of a public holiday, while the yield curve steepened slightly as super- long yields inched up.

The benchmark 10- year JGB yield added half a basis point ( bp) to 0.030 percent, moving back toward a nine- month high of 0.040 percent touched on Friday.

December 10- year JGB futures closed up 0.01 point at 150.44.

The 30- year yield rose 1.5 bps to 0.625 percent, matching the previous session’s high, which was its loftiest level since March.

The yield on relatively illiquid 40- year JGBs added 2 bps to 0.745 percent, also its highest since March.

Bank of Japan Governor Haruhiko Kuroda said on Tuesday that the BOJ will continue to buy a large amount of JGBs under its policy framework. He said large long- term debt purchases could cause problems with liquidity, but he had not seen this problem so far.

Kuroda also said the central bank’s current target of guiding the benchmark 10- year yield to around zero percent could change depending on what was needed to meet the goal of 2 percent inflation.

Meanwhile, Japanese stocks edged up in choppy trade on Tuesday to close on a five- day winning streak, but gains were limited as investors opted not to take big positions before a national holiday in Japan.

A powerful earthquake that hit northern Japan in the early morning had only a limited impact on the market.