Bank of Japan's $267-bn JGB buys spur record win streak

Japanese government bonds are headed for the longest run of annual gains on record, buoyed by central bank purchases almost equivalent to Malaysia’s economic output. The bonds have returned 2.1 per cent on an annualised basis in 2012, set for a ninth year of gains that’s the longest streak since at least 1986, a Bank of America Merrill Lynch index shows.

Ten-year yields have declined 22 basis points to 0.76 per cent. US Treasuries are poised to post a third annual gain with a two per cent return, while the benchmark rate has fallen 10 basis points.

The Bank of Japan’s JGB holdings increased 22.6 trillion yen ($267 billion) in 2012 as it sought to pump funds into a deflation-plagued economy that contracted for two quarters through September 30.