JGBs rise, tracking Treasuries and underpinned by BOJ operations

TOKYO, May 2 (Reuters) - Japanese government bond prices
rose on Thursday, with the benchmark yield falling to a nearly
two-week low, taking their cue from firmer U.S. Treasuries and
also bolstered by the Bank of Japan's asset-buying operations.  
    
    * The BOJ offered to buy 600 billion yen ($6.16 billion) in
JGBs outright with residual maturities of more than 5 years and
up to 10 years, and another 300 billion yen of notes with
residual maturities of more than 10 years. 
    The purchases are part of its easing scheme under which it
will roughly double its holdings of government debt in two years
in a bid to pull Japan out of persistent deflation.
    
    * "It is hard to imagine that yields will rise much, with
the BOJ buying so much, and pressure on yields from overseas
because of the uncertain outlook for the U.S. economy," said a
fixed-income fund manager at a European asset management firm.

    * The 10-year yield fell 1.5 basis points to
0.570 percent, its lowest since April 19. 
    
    * Ten-year futures finished morning trading up 0.22
point at 144.97, just one tick short of their session high,
which was the loftiest level since April 8.
    
    * The minutes of the BOJ's April 3-4 meeting, released on
Thursday, showed some policy board members fretted that
increased purchases of government debt could actually impair
financial markets and discourage bank lending. 
    At that meeting, the BOJ unanimously voted to radically
overhaul its monetary policy and embark on its massive stimulus
programme.
    
    * On Wednesday, the yield on 10-year Treasuries 
dropped to a four-month low of 1.614 percent after the U.S.
Federal Reserve said it would maintain its bond-buying plan,
citing risks to growth from recent U.S. government budget
tightening and emphasizing that unemployment is still high.
 
    
    * The superlong tenor also gained, with the 20-year JGB
yield shedding 1.5 basis points to 1.445 percent
and the 30-year yield losing 1.5 basis points to
1.565 percent.
    
    * Tokyo markets will be closed on May 3 and May 6 for a
string of holidays known as Golden Week.

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