Japanese government bonds firmed on Thursday, after the Bank of Japan announced its first special fixed-rate buying operation under its revamped monetary policy framework.
The benchmark 10-year yield, which rose to a nine-month high of 0.035 percent on Wednesday, was down half a basis point at 0.010 percent.
JGB yields have risen to multi-month highs in recent sessions, tracking upward moves in U.S. Treasury notes, on expectations the administration of President-elect Donald Trump will embark on reflationary policies.
Under its current monetary policy scheme outlined in September to adopt a strategy of JGB yield curve control, the BOJ has said it will guide the benchmark 10-year yield to around zero percent in an effort to stoke stubbornly low inflation and boost growth.
On Thursday, the BOJ offered to buy unlimited amount of JGBs with 1 to 3 years of maturity at an yield of 0.020 percent above the previous close.
It also offered to purchase an unlimited amount of JGBs with 3 to 5 years to maturity at 0.019 percent above the previous close.
The two-year yield shed 3 basis points to minus 0.140 percent and the five-year yield was down 4 basis points at minus 0.100 percent.
The Ministry of Finance is conducting a 20-year auction on Thursday. The central bank typically refrains from conducting buying operations on the same day as JGB auctions.
December 10-year JGB futures were last up 0.28 point at 150.70. They moved off a session low of 150.28, their lowest since January, to surge as high as 150.82 after the BOJ’s announcement.