Bid Into Off-Schedule BoJ Purchase Operations

Japanese investors are a little more cautious this morning after the BoJ outlined the previously noted unscheduled BoJ Rinban purchases to be conducted later today (we look for these to come in the usual 10:10 Tokyo/01:10 London window), leaving the major cash JGB benchmarks running little changed to 6bp richer, with 7s leading the bid. 10s are the weakest point on the curve, lagging the bid witnessed elsewhere, continuing to trade above the BoJ’s permitted 0.50% limit. Futures are now +14, more than reversing their overnight weakness after failing to challenge the cycle low registered in Friday’s Tokyo session.

• PPI data was comfortably firmer than expected, but hasn’t generated anything in the way of market reaction, giving the prevailing forces flagged above.