Flatter, But Off Best Levels

The JGB curve flattened on Monday, with the super-long end drawing support from tweaks seen within the BoJ’s quarterly Rinban plan, released after hours on Friday.

• Upsized purchases covering 5- to 25+-Year paper will ultimately result in Y550bn/month of extra JGB purchases from the BoJ through year end (in scheduled terms, actual purchases may deviate from this if the BoJ is forced into defending its YCC settings).
• Still, the long end retraced from best levels as the major domestic equity indices more than reversed their early losses.
• This leaves the major JGB benchmarks running little changed to 4bp richer.
• Futures also pulled back from best levels after failing to better their overnight session high, printing +18 as we move towards the bell.
• Comments from PM Kishida have been in line with broader expectations, as he outlined his plan to boost tourism.
• Looking ahead, 10-Year JGB supply provides the focal point of tomorrow’s domestic docket, with Tokyo CPI data also due.