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JGBs trod higher early on, perhaps on exp......>

JGBS: JGBs trod higher early on, perhaps on exp. that the BOJ would up the size
of its 5-10 Year Rinban ops, with longer dated paper outperforming and the curve
sitting flatter. The space also drew support from the latest sell-off in the
Nikkei 225, which was hampered by an earthquake in Japan, which comes shortly
after a Typhoon hitting earlier this week. The BOJ delivered & upped the size of
5-10 Year Rinban ops by Y50bn, in line with the upping of the 1-3 & 3-5 Year
purchases by Y50bn a piece earlier this week. To recap this was largely exp.
following the trimming of the quantity of ops in the bucket this month (to 5
from 6), which will result in a slightly lower amount of purchases in Sep if the
size of the Rinban ops are held constant with those conducted this week.
- Futures finished the AM session at best levels, aided by remarks from BOJ's
Kataoka, who reiterated that it is appropriate for the BOJ to conduct additional
easing to quicken the achievement of its CPI goal. He noted that he didn't see
the need to allow long term yields to move more flexibly when the BOJ is cutting
its CPI exp. We knew that Kataoka dissented at the Bank's July MonPol decision
where it decided to widen the allowable trading band for 10-Year JGB yields.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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