BOJ Nominations Officially Scheduled, Amamiya Reaffirms Status As Continuity Candidate

JGB futures tracked wider core global FI, ticking lower, before correcting from worst levels, -16 ahead of close, sticking to the recent range. Cash JGBs run 1.5bp richer to 3bp cheaper, with the curve twist steepening and 10s bumping up near the upper limit of the BoJ’s permitted YCC trading band (the BoJ has announced another 5-Year funding round for Bank’s via its pooled collateral channel as a result). Swap rates are firmer across the curve, with steepening observed there, while swap spreads are mixed. Thursday’s wider FI dynamics likely weighed on the long end.

• Parliamentary officials confirmed that the government will announce its nominations for the BoJ Governor position on 14 February, at 11:00 Tokyo time (02:00 London), with the related parliamentary hearings slated for 24 February.
• BoJ Deputy Governor Amamiya reaffirmed his status as the continuity candidate in the race to succeed Kuroda, showing little want for any change re: the Bank’s inflation target, highlighting a need for continued easing under the current policy settings (“for now”), while underscoring the need for clear communication when it comes to the attainment of its inflation target, when the time comes.
• Finance Minister Suzuki stressed that it is too soon to discuss a potential revision to the BoJ-government accord, pointing to such discussions taking place with Kuroda’s successor.
• Japanese PPI data was a touch softer than expected in January, although remained elevated.