BNP Paribas note that "the Bank of Japan...>

BOJ VIEW: BNP Paribas note that "the Bank of Japan (BoJ) opted to leave its

offer amounts unchanged on 15 August, perhaps fearing that any reduction in its

JGB purchases might add to the JPY's upward momentum, amid concern about Turkey,

passing up on an opportunity to cut back its JGB purchases. The balance of

supply and demand clearly continues to tighten, with a reduction in MoF issuance

from April (FY2018), and the newest issues to be reopened only twice rather than

three times also contributing to the tightness. The BoJ will therefore be

looking to reduce its purchases right across the curve to prevent the market

from becoming too disfunctional. The super-long sector - where investor demand

has been the main driver - is liable to underperform if the BoJ cuts back its

presence in the sector, owing to the tendency for investors to wait for slightly

better entry levels when yields are rising."