Free Trial

Cash Bonds Mostly Richer Ahead Of BoJ Policy Decision Tomorrow

JGBS

JGB futures are stronger and near session highs, +19 compared to the settlement levels, ahead of tomorrow’s BoJ Policy Decision.

  • Outside of the previously outlined mixed labour market data, there hasn't been much in the way of domestic drivers to flag.
  • Cash JGBs are mixed across benchmarks, with yields 1-2bps lower out to the 10-year and flat beyond. The benchmark 10-year yield is 1.6bps lower at 1.010% versus the cycle high of 1.108%.
  • The swaps curve has twist-steepened, pivoting at the 20s, with rates 2bps lower to 0.5bp higher.
  • Tomorrow, the local calendar will see the BoJ Policy Meeting, with markets keenly observing any steps the central bank may take towards monetary policy normalisation.
  • The BoJ is anticipated to unveil a detailed plan for reducing the pace of its bond purchases over time.
  • Regarding policy rate settings, we anticipate the BoJ will maintain its target for the overnight uncollateralized call rate, consistent with consensus. That said, it appears to be a close call.
  • See MNI BoJ Preview here.
  • Ahead of the BoJ Decision tomorrow, the local calendar will see Retail Sales and Industrial Production data.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.