JGBs gain as BoJ revives bond buying

Japanese government bonds gained on Thursday as the Bank of Japan maintained the amount of its bond buying in its open market operation.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell over 1 basis point to 0.073 percent, the yield on the long-term 30-year note dipped 1/2 basis point to 0.847 percent and the yield on short-term 2-year also slid 1/2 basis point to -0.128 percent by 04:20 GMT.

The BoJ bought JPY250 billion of 1-3 year JGBs in today's operation, JPY300 billion worth of bonds of 3-5 years of maturity and JPY410 billion worth of bonds of 5-10 years of maturity.

According to Reuters, most market players expected the BOJ to avoid causing another shock in the market, especially after U.S. bond markets were shaken by a report that China, the biggest foreign holder of U.S. Treasuries, could slow or stop buying government bonds.

Still, given the BoJ is already holding almost a half of the market after nearly five years of massive bond buying, many traders believe the central bank has little choice but to continue with its gradual reduction in the bond purchase.

Meanwhile, the Nikkei 225 index traded 0.52 percent lower at 23,665.00 by 04:20 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bullish at 115.13 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest