Futures Richer After US Tsys Finish On A Positive Note On Friday, Light Local Calendar

In post-Tokyo trade, JGB futures are richer, closing +13 compared to settlement levels, after the BOJ’s arguably dovish hold on Friday.

• The BOJ kept all the policy parameters unchanged. The policy rate stayed at -0.1%, 10yr yield target around 0%, with a -/+0.50% band on this and firm cap at 1.0%, which was introduced at the last policy meeting in July. Forward guidance was also unchanged, with the central bank maintaining its easing stance until the 2% inflation target is achieved in a stable manner. It will also not hesitate to take additional easing measures if necessary.
• US tsys closed the week with a relief rally. Cash US tsys finished 3-6bps richer, with the belly outperforming. The 10-year yield touched a new 16-year high of 4.5064% before finishing 6ps lower at 4.43%. Friday's better close came despite ‘higher for longer’ messaging from Fedspeak, which reinforced the Fed’s "hawkish hold" earlier in the week. US tsys drew support after Flash PMI data came out mixed.
• This week the local calendar sees Dept Sales today and PPI Services tomorrow. The BOJ Minutes for the July Meeting, Leading and Coincident Indices and Machine Orders are seen on Wednesday. The MOF plans to sell Y700bn of 40-year JGBS on Tuesday.