A Limited End To The Week

JGB futures shrugged off the latest BoJ decision, with the upcoming assessment of the Bank's QQE with YCC scheme on the back of the sustained deviation from its inflation target flagged ahead of time by the Nikkei. There is little scope for major policy tweaks stemming from the assessment given the Bank's comments re: QQE with YCC i.e. there is no need to change the framework. The corporate liquidity provision extension was in line with broader expectations, at least in terms of time horizon (through the end of Sep '21), with the scheme made a little more generous overall (see earlier bullet for further details). Futures finished -1 on the day, with yields little changed across the JGB curve, although the short end was generally a touch firmer than the long end.

• The space also looked through the softest domestic headline CPI reading in a little over 10 years, with the dynamic providing no real shock vs. market and BoJ expectations.
• The government's latest economic update was in line with recent source reports, so provided no shocks, with a marginal uptick in the GDP exp. for the incoming FY, while various source reports pointed to unsurprising record budget levels for the coming FY.