Light Pressure For Futures On Q124 Rinban Tweak

The BoJ has reduced the lower bound of purchase sizes of 1- to 10-Year JGB buckets by Y50bn per operation in its Q124 buying plan, with the longer end of the curve (10+-Year paper) seeing a reduction in the number of scheduled monthly operations (10- to 25- and 25+-Year JGBs will see 1 less round of JGB purchases per month, respectively).

• There had been plenty of speculation re: tweaks to lower purchase bounds in the Q1 plan, although the reduction in the frequency of purchases further out the curve may have surprised some, resulting in some modest pressure for JGB futures. The contract remains within the Tokyo session range.