Cheaper At Lunch, Narrow Ranges, Results Of BoJ Rinban Operations Due

At the Tokyo lunch break, JGB futures are weaker, -12 compared to settlement levels, after dealing in a relatively narrow range.

• Today, the local calendar is light, with Leading & Coincident Indices due later.
• The results of the BoJ’s Rinban operations covering 5- to 25-year+ JGBs are also due later.
• (Bloomberg) -- The Bank of Japan should nimbly end its negative interest rate policy with minimum fuss, according to an economics professor and former adviser to an economic panel for the prime minister. “Of course, it’s time for the BOJ to normalize policy,” Hiroshi Yoshikawa, professor emeritus at the University of Tokyo, said in an interview Tuesday.
• “Measures from the negative rate to yield curve control have all been characterized as ultra-easy policy. But we’re not in a situation where we need them anymore.” (See link)
• The cash JGB curve has bear-steepened, with yields flat to 2bps higher. The benchmark 10-year yield is 0.8bps higher at 0.701% versus the Nov-Dec rally low of 0.555% and the February high of 0.770%.
• The swaps curve has also bear-steepened, with rates flat to 3bps higher. Swap spreads are tighter out to the 30-year.