JGBs gain after benign U.S. inflation data, BOJ purchase

TOKYO, Sept 15 (Reuters) – Japanese government bond prices gained on Wednesday, supported by benign U.S. inflation readings and strong results of the Bank of Japan’s purchase in medium-term bonds.

In the 12 months through August, the U.S. core CPI increased 4%, slowing further from 4.5% increase in June, reducing expectations the Federal Reserve will rush to taper its bond buying.

By late afternoon trade, benchmark 10-year JGB futures rose 0.12 point to 151.86.

The 10-year JGB yield fell 0.5 basis point to 0.035%.

The 20-year yield dropped 0.5 basis point to 0.415% while the 30-year yield was flat at 0.645%.

Shorter yields moved little, with the benchmark two-year yield and five-year yield both unchanged at minus 0.130% and minus 0.105%, respectively.

The Bank of Japan’s buying on Wednesday attracted limited selling, underscoring the firmness of the market. The bank bought 1.325 trillion yen ($12.1 billion) of JGBs with one to 10 years to maturity.

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