BoJ Gov Kuroda reiterated caution re: the......>

JGBS: BoJ Gov Kuroda reiterated caution re: the limits of further easing, albeit

stressing an ability to act, which allowed futures to edge away from highs, last

+7, yields 0.1-1.4bp lower across the curve, modest bull flattening in play.

- The breakdown of today's BoJ Rinban ops was bland, with the size of the Bank's

1-10 Year JGB purchases held constant. Spreads were a little closer to neutral

levels, nut still -ve, with the offer to cover ratios edging up across all 3

buckets (the most notable move came in the 3-5 Year ops 3.31x vs. prev 2.07x).

- On the fiscal front, Japanese FinMin Aso noted that he is not sure how he

would choose to fill a potential shortfall in tax revenues, when questioned on

the possibility of issuing deficit-covering bonds. This comment came after he

suggested that FY19 tax revenue may be smaller than estimated (and 
Elsewhere, JiJi Press covered comments from senior LDP party member Nikai, who
noted that "the gov't must compile a supplementary budget of around Y10tn for
the current fiscal year. The gov't plans to compile a stimulus package as soon
as possible as a pre-emptive measure against heightening overseas risks."
- 20-Year supply and monthly trade data headlines tomorrow's local docket.