JGBs Soar On BoJ Daily Unlimited Bond Buying Plan

The BoJ provided a shot in the arm for Japanese FI space by announcing its plan to conduct unlimited fixed-rate bond buying operations every business day, "unless it is highly likely that no bids will be submitted". The move reaffirmed the central bank's resolve in defending the 0.25% upper end of its permitted trading band for 10-year JGB yield. Apart from announcing daily bond buying operations, the Bank maintained its ultra-loose policy settings, while forecasting that faster inflation won't last.

• JGB futures re-opened sharply higher after the Tokyo lunch break, drawing support from the BoJ decision. JBM2 last changes hands at 149.64, 33 ticks above previous settlement. Cash JGBs rallied, with yields broadly lower, as the curve flattens. Japanese retail sales (beat) and flash industrial output (miss) released earlier in the session were shrugged off. As a reminder, Japanese financial markets will be closed from tomorrow, owing to a public holiday.
• The spillover into U.S. Tsys was limited, although T-Notes indeed moved away from session lows. TYM2 last deals -0-02 at 119-23+, while Eurodollar futures run 0.5-2.5 ticks through the reds. Cash Tsy yields sit 0.5bp-0.8bp lower across the curve. Advance U.S. GDP & weekly jobless claims headline the local data docket today, with a 7-Year Tsy auction also due.
• Australian YM trades -1.5 & XM -4.0. Bills last -9 to +2 ticks through the reds. Cash ACGB yields sit 1.5bp-3.5bp higher across the curve. Australia's terms of trade came and went.