Futures Aided By Gilt Bid & BoJ Rinban Plan On Friday, But Fade From Best Levels

JGB futures initially benefitted from the Gilt-driven bid in the final overnight session of last week, before fading alongside a cheapening move in U.S. Tsys, leaving the contract +14 at the end of post-Tokyo dealing.

• The BoJ’s quarterly Rinban plan would have also factored into the early post-Tokyo bid, with a Y50bn/operation boost to 5- to 10-Year purchases, a Y125bn/operation boost to 10- to 2-Year JGB purchases and a Y50bn/operation boost to 25+Year purchases. This equates to Y550bn/month of extra purchases through year end (in scheduled terms, actual purchases may deviate from this if the BoJ is forced into defending its YCC settings). A reminder that September saw the BoJ upsize its 5-/10- & 10-25-Year purchases as it defended its YCC mechanism.
• The quarterly Tankan survey from the BoJ headlines the domestic docket today, with flat to modest upticks seen for most of the readings.
• The accounts from the latest BoJ monetary policy decision are also due, as is the final manufacturing PMI print.