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

JGBS: JGBs surged on the back of the BOJ decision on Tuesday, 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.

- This left the 5-/40-Year curve 9.2bp flatter on the day.

- In the press conference BOJ Gov. Kuroda suggested that yields would be allowed

to fluctuate by around double the amount that was previously prescribed, which

weighed on futures during the overnight session, before they stabilised around

the middle of Tuesday's range.

- Focus today falls on the BOJ's Rinban ops covering the 1-5 Year sector.