TOKYO, Jan 20 (Reuters) - Yields on Japanese government bonds (JGBs) fell on Friday amid lack of liquidity in the market after the Bank of Japan ramped up its bond-buying before its policy meeting.
The 10-year JGB yield fell as low as 0.375%before settling at 0.400%, down 0.5 basis points from the previous day's close.
"Because the BOJ ramped its bond-buying before the policy meeting, there is not much 10-year notes left in the market," said Ataru Okumura, strategist at SMBC Nikko Securities.
"There are demand for bonds to cover short positions, but largely the yield fell even with small buy orders due to the dearth of bonds."
The outcome of the BOJ's scheduled bond-buying earlier in the day was firm, market participants said. The BOJ offered to buy 575 billion yen ($4.45 billion) of the bonds with maturities between 5 to 10 years, the lowest amount of the range it had set last month.
The central bank also offered to buy bonds in other tenors, including one-year to three-year maturities and maturities with more than 25 years.
The 20-year JGB yield fell 2 basis point to 1.280% and the 30-year JGB yield was flat at 1.545%.
The 40-year JGB yield fell 2.5 basis points to 1.835%.
The five-year yield fell 2 basis points to 0.195% and the two-year JGB yield fell 0.5 basis point to -0.010%.
Benchmark 10-year JGB futures hit 147.25, its highest level since Dec. 20, before easing to 147.06. ($1 = 129.1700 yen) (Reporting by Junko Fujita)
