BoJ: Reduction in the number of long bonds - BBH

The Bank of Japan reduced the number of long bonds (25 years-plus) by JPY10 bln to JPY90 bln and is the first reduction since March, notes the research team at BBH. 

Key Quotes

“The unexpected move weighed on JGBs.  There had been talking among primary dealers in Japan that the government was considering reducing issuance of bonds will very long maturities (40 years) in the next fiscal year, and this had resulted in what some thought was an undesirable flattening of the curve.  Separately, we note that last week was the first in four weeksthat the Ministry of Finance data showed Japanese investors turned net buyers into foreign bonds.”   

“The backing up of US 10-year Treasury yields appear to be lending support to the greenback against the yen.  The dollar had slipped to almost JPY111.00 yesterday.   The US 10-year yield is up nearly three basis points today (to almost 2.35%), and this has coincided with dollar upticks toward the lower end of the previous band of support (JPY111.65-JPY111.80).”