The minimum fee rate for three on-the-run issues of 10-year JGBs will be revised to 1% in principle, up from 0.25% currently, starting from 27 February. The BOJ adds that if yields for those issues in the secondary market are not expected to reach 0.50% - which is the upper limit set - then the central bank will not necessarily conduct fixed-rate purchase operations for consecutive days for said issues. More on that here.
On the revision, the central bank says that this is to ensure that the use of its Securities Lending Facility (SLF) is in line with its purpose and to facilitate money market operations. This comes after they are said to observe that there has been massive short-selling in 10-year JGBs on the assumption that the SLF is to be used for a longer-term.
This looks to be another attempt by the BOJ to try and arrest the selling in 10-year JGBs as yields continue to press up against the 0.50% ceiling:
