BoJ Quarterly Rinban Plan Drives Super-Long End Bid & Curve Flattening

The wider JGB curve has twist flattened, with the longer end drawing support from the previously outlined upsizing of the BoJ’s Rinban operations in the Bank's quarterly outline, leaving the major cash JGB metrics running 1bp cheaper to 5bp richer at typing, with a pivot around 5s. 10-Year JGB yields continue to hover a touch below the upper-limit of the BoJ’s permitted trading band.

• JGB futures deal +22, edging higher in early Tokyo dealing as local participants react to the BoJ’s quarterly Rinban adjustments.
• The major quarterly BoJ Tankan index readings were generally in line to a touch softer vs. exp., while the capex intentions print topped median exp. There hasn’t been much in the way of meaningful spill over from that release.