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Light Pressure As JiJi Points To Some BoJ Support For A Rate Hike

JGBS

JGB futures revisited Tuesday’s Tokyo low as JiJi reported that some BoJ board members are likely to say lifting negative interest rates is reasonable at the March meeting.

  • Subsequent coverage from BBG noted that the article pointed to “at least one” BoJ board member having such a view, which limited the JGB sell off to 15-ticks, given perceptions re: a lack of broad support of the idea.
  • The contract last prints -12 at 146.32, 5 ticks off lows.
  • 10-Year JGB yields stuck within the range seen in recent sessions, adding ~0.5bp on the headlines to finish Tokyo trade at 0.72%, a little below knee-jerk highs that were seen on the initial JiJi headlines.
  • Similar moves were seen in 2s and 5s.
  • OIS markets moved to price a ~50% chance of a 10bp March hike (vs. 30% before the story crossed), with a BoJ exit from NIRP now fully priced through the end of the June meeting (vs. 90% pre-report).
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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