JGBs surged on the back of the BOJ decision,...>

JGBS: JGBs surged on the back of the BOJ decision, after futures extended to

fresh lows heading into the decision as some suggested that the later than usual

time pointed to impending action (it was the latest delivery of the decision

since the intro of YCC in Sep 16). The BOJ introduced forward guidance, noting

that it intends to keep very low rates for an extended period of time, while it

maintained its 10-Year JGB yield target at about 0.00%, albeit highlighting

greater flexibility in bond operations moving forwards. There was a 7-2 vote on

YCC matters. The Bank also trimmed its CPI forecasts & tweaked its ETF purchase

programme.

- 10-Year JGB yields are back in to 0.065% last after sitting just above 0.11%

heading into the decision, while the 5-/40-Year JGB Yield Spread sits around

8.0bp flatter on the day.

- Longer dated swap positions betting on a hawkish BOJ outcome have seemingly

been unwound in the wake of the decision.

- Eyes now move to the upcoming press conference from Gov Kuroda.