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Negative-rate jitters grow in JGB market

The Financial Bureau of the finance ministry is growing jittery about every policy step taken by the Bank of Japan.

TOKYO -- Mitsubishi UFJ Morgan Stanley Securities bought 1.15 trillion yen ($11 billion) worth of two-year Japanese government bonds, half the sum offered by the finance ministry, at an auction at the end of August. "I have never seen such a large purchase," a veteran bond trader said.

The purchase came after the Bank of Tokyo-Mitsubishi UFJ, the core business of Mitsubishi UFJ Financial Group, quit as a primary dealer of JGBs in July. Although the bank was said to be about to start shunning the JGB market, Managing Executive Officer Kazuto Uchida said it "has not changed its stance." Indeed, securities companies affiliated with the financial group are aggressively buying JGBs.

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