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

JGBS
JGBS: JGBs trod higher early on Thursday, on exp. that the BOJ would up the size
of its 5-10 Year Rinban ops. The space also drew support from the latest
sell-off in the Nikkei 225, which was hampered by an earthquake in Japan & comes
shortly after a Typhoon hit earlier this week. There was also talk of paid swap
unwinds from abroad, which weighed on the longer end of the swaps curve,
allowing the JGB curve to steepen. 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. This was largely exp. following
the trimming of the quantity of ops in the bucket in Sep (to 5 from 6), which
will result in a slightly lower amount of purchases if the size of the Rinban
ops are held constant with those conducted this week.
- The space was also supported 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
already knew that Kataoka dissented at the Bank's July MonPol decision.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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