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

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.