Free Trial

Mixed, Light Calendar Ahead Of BoJ Policy Decision Tomorrow

JGBS

JGB futures are richer in afternoon dealings, +24 compared to settlement levels, ahead of the BoJ Policy Decision tomorrow.

  • There hasn’t been much in the way of domestic drivers to flag today.
  • After Friday’s pushback by Fed officials against market expectations for easing in 2024, local participants were watchful of early weakness in US tsys during today’s Asia-Pac session. However, with no follow-through seen, local market selling abated. Currently, US tsys are dealings flat to 2bps richer.
  • Cash JGBs are dealing mixed, with 0.6bps lower (10-year) to 2.7bps higher (2-year).
  • Swaps are also mixed, with swap spreads tighter.
  • Tomorrow, the local calendar sees the BOJ Policy Decision. Our analysis aligns with the prevailing consensus, which once again foresees the BoJ keeping all key targets and YCC parameters unchanged.
  • Despite previous surprises in July and October, coupled with December last year, indications suggest a different outcome this time. The likelihood of the BoJ terminating its negative interest rate policy (NIRP) without prior adjustments to forward guidance appears low.
  • We anticipate that any revisions to forward guidance would likely coincide with the publication of an Outlook Report in January or April. Ultimately, a shift from the current strong easing bias to a tightening bias should be necessary before the BoJ considers rate hikes. See the MNI BoJ Preview here:
216 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

JGB futures are richer in afternoon dealings, +24 compared to settlement levels, ahead of the BoJ Policy Decision tomorrow.

  • There hasn’t been much in the way of domestic drivers to flag today.
  • After Friday’s pushback by Fed officials against market expectations for easing in 2024, local participants were watchful of early weakness in US tsys during today’s Asia-Pac session. However, with no follow-through seen, local market selling abated. Currently, US tsys are dealings flat to 2bps richer.
  • Cash JGBs are dealing mixed, with 0.6bps lower (10-year) to 2.7bps higher (2-year).
  • Swaps are also mixed, with swap spreads tighter.
  • Tomorrow, the local calendar sees the BOJ Policy Decision. Our analysis aligns with the prevailing consensus, which once again foresees the BoJ keeping all key targets and YCC parameters unchanged.
  • Despite previous surprises in July and October, coupled with December last year, indications suggest a different outcome this time. The likelihood of the BoJ terminating its negative interest rate policy (NIRP) without prior adjustments to forward guidance appears low.
  • We anticipate that any revisions to forward guidance would likely coincide with the publication of an Outlook Report in January or April. Ultimately, a shift from the current strong easing bias to a tightening bias should be necessary before the BoJ considers rate hikes. See the MNI BoJ Preview here: