Reuters: US Dollar Report: UPDATE 1-BOJ official says to increase frequency of JGB buys again

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-BOJ official says to increase frequency of JGB buys again May 29th 2013, 10:14 Wed May 29, 2013 6:14am EDT * BOJ meets investors to discuss JGB volatility * BOJ to release market operations schedule on Thursday * JGB yields rising after BOJ monetary policy overhaul By Stanley White and Leika Kihara TOKYO, May 29 (Reuters) - A senior Bank of Japan official said on Wednesday the central bank is prepared to increase the frequency of its debt purchases again upon the request of institutional investors to help lower volatility and stem a spike in yields. The BOJ may be able to buy Japanese government bonds around 10 times per month, which would be an increase over May's eight purchases, and to be flexible with the size of monthly purchases. The BOJ plans to release a debt purchase schedule for June on Thursday evening, the official said after meeting with bond dealers, as the central bank tries to contain turbulence caused by its overhaul of monetary policy last month. "We do not welcome recent excessive volatility, so we invited market participants to hear their views," the BOJ official told reporters after the meeting. "We are prepared to respond to requests for more frequent operations." The BOJ has met with bond dealers three times since the April overhaul of monetary policy and has already increased the frequency of purchases once as investors come to grips with the central bank's new policy. The 10-year cash JGB yield rose 3.0 basis points to 0.935 percent on Wednesday. It briefly rose to 0.965 percent, near a 13-month high of 1 percent hit on May 23 as U.S. bond yields surged after solid U.S. consumer confidence data. In April, the BOJ launched a new quantitative and qualitative easing to nearly double the monetary base to 270 trillion yen ($2.64 trillion) by the end of 2014 in order to end two decades of stagnation and achieve 2 percent inflation in two years. The BOJ's strategy rests on buying 7.5 trillion yen of long-term government bonds per month, roughly 70 percent of newly issued government debt. BOJ Governor Haruhiko Kuroda initially said the debt purchases would lower yields across the curve to help end deflation. However, the purchases are so large that liquidity initially fell in the debt market, leading to a sudden rise in yields. Many institutional investors, including investment banks and life insurers, recommended the BOJ buy more debt in the 1 to 5-year zone to help lower volatility, the official said. There may be limits to what the BOJ can do as part of its mandate is to buy longer-term debt. Some market participants said the central bank should consider offering funds in money market operations beyond one year to contain volatility in the Japanese government bond market, a senior BOJ official said on Wednesday. The official said that during the discussion with market participants, he did not give a direct reply on whether that request could be met. Many participants also said the BOJ should avoid buying JGBs on days when the finance ministry is auctioning new debt, according to the official. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions