Fallout From Rinban Tweak Eyed

Tweaks to the BoJ's Rinban plan pressured futures in after-hours trade, although the contract recovered from the knee-jerk lows to close down 7 ticks at the end of overnight trade.

• To recap, the BoJ trimmed its planned purchases for the 1- to 3-Year bucket to Y450bn per operation from Y475bn. It also reduced the planned purchase sizes in the 5- to 10-Year to Y425bn per operation from Y450bn previously, while cutting the size of its 10- to 25-Year bucket planned purchases to Y150bn per operation from Y200bn previously.
• The BoJ also provided guidance on its Rinban purchases on a quarterly basis for the first time.
• The tweaks/release alteration came after the latest BoJ meeting with the bond market group (minutes released on Monday 28 June) saw market participants note the following: "The reduction in the size and the frequency of outright purchases of JGBs in April was appropriate in terms of maintaining market functioning. However, frequent changes in the purchase size would rather draw attention to the Bank's market operations. Hence, we believed it might be better to make changes to the purchase size about once every three months."
• Preliminary industrial production data headlines the local docket on Wednesday, although reaction to the Rinban tweaks will garner most of the attention.