Bond profitability dropped after the Bank of Japan increased its purchases

The Bank of Japan increased the planned bond purchases in the current quarter. After that, on Monday Japan's government bond (JGB) yields dropped sharply.

The central bank increased twice its planned purchases of JGBs with maturities of 10 to 25 years in October and December. Following this decision, the 20-year JGB yield decreased to 0.950%. It is the lowest level since September 22.

A market participant from a local brokers company said that the increase in the sums twice during this period was a "positive surprise."

However, according to some other analysts, the Bank of Japan's statement is not expected to have a lasting influence because of rising profitability worldwide.

Makoto Suzuki, senior strategist at Okasan Securities, said about the decline in market profitability.

He added that Japan will do its best to resist the rising pressure of profitability in other countries.