Futures Weaker At Lunch Ahead Of The BoJ Policy Decision

At the Tokyo lunch break, JGB futures are holding overnight weakness, -9 compared to settlement levels.

• There hasn’t been much in the way of domestic drivers to flag ahead of today’s BoJ Policy Decision.
• We are now in the BoJ window, with bond cash trading shut until 12:25 pm local time.
• Bloomberg notes "The central bank has released a policy statement at an average of 11:56am local time since the introduction of yield-curve control in September 2016. The data exclude decisions that were accompanied by the BoJ’s outlook reports on growth and inflation as well as the meeting in March 2020 that was brought forward by a few days and the emergency gathering in May 2020. A range of one standard deviation is between 11:34am and 12:18pm."
• Our analysis aligns with the prevailing consensus, which once again foresees the BoJ keeping all key targets and YCC parameters unchanged. See the MNI BoJ Preview here.
• Cash JGBs are dealing slightly mixed, with yield movements bounded by +2bps (1-year) and -0.5bp (5-year). The benchmark 10-year yield is 0.2bp lower at 0.678%.
• The swaps curve is also dealing mixed. Swap spreads mixed.