A security guard walks past in front of the Bank of Japan headquarters in Tokyo, Japan January 23, 2019. REUTERS
TOKYO, March 31 (Reuters) - The Bank of Japan (BOJ) on Friday reduced the minimum size of its planned Japanese government bond (JGB) purchases for all maturities over the next three months.
The BOJ said it would offer to buy between 475 billion yen and 875 billion yen ($3.57 billion-$6.57 billion) of 5-year to 10-year bonds, lowering the bottom end of the range from 575 billion yen in the previous three months.
The BOJ conducted massive bond buying in the past months to defend its 0.5% policy cap for the 10-year JGB yield under its yield curve control (YCC) policy, causing distortions in the yield curve and dearth of bonds in the market.
Upward pressure on yields eased as investors scooped up safe-heven debt in the wake of financial shocks, such as the collapse of U.S. banks and Swiss lender Credit Suisse's liquidity issues.
The 10-year JGB yield, which hovered at the top end of the BOJ's policy band until earlier this month, fell to as low as 0.240% on March 14 and it last traded at 0.320%.
The BOJ also left an option to boost its bond purchases, raising the maximum size of the purchases for all the tenors.
($1 = 133.1900 yen).
(Source: Reuters), all rights reserved by original source.
