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JGB futures shed 7 ticks in overnight trade....>

JGBS: JGB futures shed 7 ticks in overnight trade. The contract was initially
pressured by the BoJ's latest Rinban plan adjustments, with little support for
the super-long end seen, which could facilitate further curve steepening in
Tokyo cash trade (although most expected such a move). The BoJ lifted the upper
limits of its Rinban op purchase bands out to 10 Years for the month of July.
The reasoning behind such a move was 2-fold. 1) It will have to deal with the
increase in JGB supply to finance fiscal spending. 2) It wants a steeper curve.
The Bank also lifted the lower boundary of its 1-3 Year JGB purchase band. A
softer Tsy complex kept a lid on the contract in overnight trade, as it finished
off worst levels.
- Elsewhere, plans/speculation of Japan's re-opening to foreigners continue to
do the rounds, while the Tokyo government confirmed it will focus on the broader
trend of COVID-19 cases in the city, as opposed to absolute levels, when
assessing measures re: the virus (in line with earlier press reports).
- See earlier bullet for recent commentary from BoJ Deputy Governor Wakatabe.
- The Q2 Tankan survey & 3-5 Year BoJ Rinban ops headline locally today.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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