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Diverging reactions from the yen and JGB's....>

JAPAN
JAPAN: Diverging reactions from the yen and JGB's post rate decision from the
BoJ. Market has seen upbeat assessment of the economy as well as slightly
tweaked language on inflation as bullish for the yen. Statement says inflation
expectations are broadly unchanged, previous statement said inflation
expectations were in a weakening phase.
- However relief at unchanged policy measures from the BoJ has seen a bid in
JGB's. In particular the BoJ maintained the monetary base target at Y80tln
annually. The BoJ's actual purchases were around Y57tln in 2017. The decision to
maintain the official Y80tln target gives traction to the theory that the
quantity of JGB purchases is an endogenous variable under Yield Curve Control,
the pace of which could could slow or speed up depending on trends in the
economy and markets.
- JGB futures last up 9 ticks at 150.46 from 150.40 at the lunch break.

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