MNI EUROPEAN OPEN: BoJ Widens 10-Year JGB Yield Trading Band, Tweaks Broader Settings

EXECUTIVE SUMMARY

• BOJ WIDENS PERMITTED 10-YR JGB YIELD RANGE TO -/+0.25%
• FIRST U.S.-CHINA MEETING UNDER BIDEN GETS OFF TO A ROCKY START (CNBC)
• EUROPE RESTARTS ASTRA VACCINES AFTER SAFETY ENDORSEMENT (BBG)
• FRENCH GOVERNMENT ANNOUNCES MONTHLONG LOCKDOWN IN PARIS AREA (BBG)

Fig. 1: Nikkei 225 vs. TOPIX

Source: MNI - Markets News/Bloomberg

UK

CORONAVIRUS: Britain will receive fewer COVID-19 vaccines in April than it got in March, but is still on course to hitting its target of offering shots to all adults by the end of July, Prime Minister Boris Johnson said on Thursday. "It is true that in the short term we're receiving fewer vaccines than we had planned for a week ago," Johnson told a media conference, saying this was because of a delay in a shipment from India's Serum Institute and because a batch in the UK needed to be retested. "As a result, we will receive slightly fewer vaccines in April, than in March, but that is still more than we received in February, and the supply we do have will still enable us to hit the targets we have set," he said. (RTRS)

CORONAVIRUS: More than half of the country's employees travelled to work last week for the first time since official figures began being recorded last June. The Office for National Statistics reported that 53 per cent of workers travelled to their place of employment at least once during the week to March 14, up from 48 per cent the week before. The findings suggest that people began returning to the workplace after schools reopened in England on March 8. With the country still in lockdown, official advice is that people should continue to work from home if possible. Despite the drift back to the office, new habits appear likely to remain a permanent feature of the economy after the pandemic is over. (The Times)

FISCAL: Rishi Sunak's departmental spending cuts in the budget were deeper than thought, analysis by the Institute for Fiscal Studies shows. The chancellor took advantage of a change in the Office for Budget Responsibility's inflation outlook to cut everyday spending budgets by £4 billion in cash terms from 2022-23 onwards while holding fast to the government's principle that it is ending austerity. However, the IFS found that he did not apply the same principle to the OBR's higher inflation forecast for 2021-22. Rather than raise cash spending, he held it. Ben Zaranko, an IFS research economist, said the double standards showed that the claim that the cut was a response to the altered inflation outlook did not stand up to scrutiny. (The Times)

SCOTLAND: A Scottish parliamentary committee has concluded that First Minister Nicola Sturgeon misled parliament. Sky News understands that Holyrood's harassment committee has reached the conclusion by a majority vote ahead of the publication of its final report. Members have decided that Ms Sturgeon misled the committee itself and, as such, misled parliament and potentially breached the ministerial code of conduct. (Sky)

EUROPE

ECB: Schnabel: Inflation accelerated quickly, but still temporary. (BBG)

EU: The European Union may start punishing rule-of-law offenders this year with a new sanctions tool that could see countries lose out on billions of euros, a timetable far quicker than earlier expectations. Vera Jourova, the European Commission vice president in charge of values, is helping draft guidelines for how the EU will implement new powers to penalize countries that don't uphold the bloc's democratic standards. One option will be to freeze funds from the EU's 1.8 trillion-euro ($2.2 trillion) stimulus package before they've been disbursed. "I will promote the system that we can sanction potential money, not the money already spent," Jourova said in an interview with Bloomberg on Thursday. (BBG)

CORONAVIRUS: The European Union's drug regulator said AstraZeneca's Covid-19 vaccine is safe to use, but warned it can't completely rule out a link between the shot and blood clotting side effects. At a briefing on Thursday, officials at the European Medicines Agency emphasized repeatedly that the vaccine is "safe and effective," and the benefits outweigh the risks. The comments followed a review after several European countries suspended Astra shots after a number of cases emerged. The EMA said there were seven cases of blood clots in multiple vessels, and 18 cases of a type of cerebral vein clotting that's hard to treat, out of about 20 million inoculations. While describing the cases as "rare," it's recommending that a warning is added to the shot to make sure the public is better informed. Germany, Italy, France, Spain and Bulgaria are among the European nations saying they would resume AstraZeneca's vaccination, while Norway and Sweden will decide after conducting their own reviews. (BBG)

FRANCE: France is locking down the Paris area as it suffers to contain a third wave of the coronavirus epidemic, Prime Minister Jean Castex announced. In a bid to contain the resurgence in cases, only essential businesses and schools will stay open, he said on Thursday. The measures will start from midnight on Friday and will remain in place for four weeks. (BBG)

FRANCE: The French government's new restrictions to contain a resurgence of the coronavirus will knock 0.2 percentage points off annual gross domestic product, Finance Minister Bruno Le Maire says. Support measures for closed businesses will cost an extra 1.2 billion euros a month, bringing the total current cost of support to 7.2 billion euros, Le Maire says. French government's most recent growth forecast was 6% for 2021. (BBG)

SWEDEN: Swedish residential property prices rose 2.3% on the month in February, according to the Nasdaq OMX Valueguard-KTH Housing Index, HOX Sweden. HOX Sweden advanced 5.4% in the 3 months through February and rose 12.6% y/y. Adjusted for seasonal effects, the index rose 1.4% m/m in February. (BBG)

DENMARK: Denmark will ease some restrictions on March 22, before a previous deadline of April 6, after the number of virus cases stabilized in recent weeks. The limit on public crowds will be raised to 10 from 5 and more students will be allowed to return to schools, the government said in a statement on Thursday. (BBG)

RATINGS: Potential sovereign rating reviews of note scheduled for after hours on Friday include:

• Fitch on Estonia (current rating: AA-; Outlook Stable), Latvia (current rating: A-; Outlook Stable) & Poland (current rating: A-; Outlook Stable)
• Moody's on the European Union (current rating: Aaa; Outlook Stable) & Portugal (current rating: Baa3; Outlook Positive)
• S&P on Belgium (current rating: AA; Outlook Stable) & Spain (current rating: A; Outlook Negative)
• DBRS Morningstar on Greece (current rating: BB (low), Stable Trend)

U.S.

FED: Federal Reserve Chair Jerome Powell is scheduled to speak Monday at a Bank for International Settlements conference on innovation in the digital age, the U.S. central bank said on Thursday. On Tuesday, Powell will testify before the House of Representatives Financial Services Committee, and on Wednesday he will testify before the Senate Banking Committee, on the Coronavirus Aid, Relief, and Economic Security Act, the Fed said. The appearances come after the Fed signaled Wednesday that it will hold rates at their current near-zero level through 2023, even as policymakers boosted their forecasts for economic growth and inflation. (RTRS)

CORONAVIRUS: The Biden administration is looking toward the middle of May to relax restrictions on travel across the borders with Mexico and Canada and on inbound international travel from the U.K., Europe and Brazil, according to two sources familiar with the matter. While there has not been a policy memo or formal codification of that time frame, the discussion has focused on trying to limit the spread of variants domestically as localities make their own decisions on how quickly to reopen. In the meantime, officials have suggested President Joe Biden and his Covid task force need more time to feel comfortable with reopening borders and increasing the level of air traffic from overseas. (CNBC)

CORONAVIRUS: New Jersey's indoor capacity limits for restaurants and gyms will be raised to 50% from 35% as of Friday, Gov. Phil Murphy announced Thursday. (CNBC)

CORONAVIRUS: Massachusetts will allow indoor and outdoor stadiums, arenas and ballparks to reopen beginning Monday at a "strict 12% capacity limit," according to a statement from Gov. Charlie Baker's office. (CNBC)

CORONAVIRUS: Florida Governor Ron DeSantis rejected so-called vaccine passports for his state, calling them "a bad idea" that crimps free choice and is "not how you get society back to normal." "Under no circumstances will the state be asking you to show proof of vaccination," for instance to attend a sports event, "and I don't think private companies should doing that either," DeSantis told reporters Thursday in comments posted on his Twitter feed. (BBG)

CORONAVIRUS: President Joe Biden announced the U.S. on Friday will clinch his goal of administering 100 million Covid-19 vaccine shots in the first 100 days of his presidency, reaching the mark six weeks ahead of time. "I'm proud to announce that tomorrow, 58 days into our administration, we will have met my goal of administering 100 million shots to our fellow Americans. That's weeks ahead of schedule," Biden said, speaking Thursday at the White House. The U.S. recorded 2.7 million more doses on Thursday, pushing the cumulative total to 115.7 million shots given, according to the U.S. Centers for Disease Control and Prevention. As of data reported on inauguration day, the U.S. had given about 16.5 million doses. (BBG)

CORONAVIRUS: Illinois adults of all ages, except those in Chicago, will be eligible to receive a Covid-19 vaccine from mid-April, Governor Jay Pritzker announced on Thursday while laying out new guidelines aimed at further easing pandemic-era restrictions across the state. (FT)

CORONAVIRUS: Maryland Gov. Larry Hogan said in a press briefing that the state will open vaccinations to residents aged 16 and older starting April 27, though people in that age group with underlying health conditions will be eligible beginning March 30. All Maryland residents aged 60 and over can get vaccinated beginning on Tuesday, he added. (CNBC)

FISCAL: Payments to U.S. states, municipalities, territories and tribal governments under President Joe Biden's stimulus act will take about 60 days to go out as the U.S. Treasury writes rules on how the funds can be used, Treasury officials said on Thursday. A Treasury official told reporters on a conference call the department would consult with state and local governments in coming weeks on the program, which provides up to $350 billion to close budget gaps opened up by the coronavirus pandemic. (RTRS)

FISCAL: Progressives in the House and Senate plan to set down a marker Thursday for President Joe Biden's infrastructure plans, introducing a $500 billion proposal to shift U.S. transportation away from fossil fuels. Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez, two proponents of the Green New Deal, are behind the bill, joined by Senator Edward Markey of Massachusetts and Representative Andy Levin of Michigan. Their plan aims to accelerate the process of making the U.S. carbon neutral by 2050—a goal Biden campaigned on—by putting the money in the hands of state, local and tribal governments or transit authorities to make sweeping investments in public transit systems. (BBG)

POLITICS: The Biden administration on Thursday nixed plans for a political event to sell the president's Covid relief bill in Atlanta on Friday, announcing plans instead to meet with Asian American leaders there in the wake of a string of shootings at spas earlier this week. President Joe Biden and Vice President Kamala Harris had originally planned to travel to Atlanta on Friday as part of the White House's "Help is Here" tour to tout the benefits of the $1.9 trillion Covid relief bill he signed last week. But the White House announced Thursday that it would push the political event to a later date. (POLITICO)

MARKETS: Investors would face a 0.1% tax on each sale of stocks, bonds and derivatives under a Democrat-led proposal aimed at curbing risky trading behaviors. The new tax would apply to the fair market value of stocks and bonds, and to payment flows under derivatives contracts. Initial public offerings and short-term debt would be exempt under the bill, which was reintroduced in the Senate Thursday by Hawaii's Brian Schatz. Progressive lawmakers are increasingly calling for higher taxes as a way to combat inequality. Schatz says a tax on financial transactions would discourage unproductive trading and redirect investment toward more productive areas of the economy. (BBG)

OTHER

U.S./CHINA: The first high-level gathering of U.S. and Chinese officials under President Joe Biden kicked off with an exchange of insults at a pre-meeting press event Thursday. A planned four-minute photo session for the officials to address reporters ended up lasting one hour and 15 minutes due to a frothy exchange, NBC said. Both the Chinese and U.S. side kept calling the reporters back into the room so they could add remarks. Expectations were already low for the meeting in Alaska with U.S. Secretary of State Antony Blinken, National Security Advisor Jake Sullivan, Chinese Foreign Minister Wang Yi and Yang Jiechi, director of the Central Foreign Affairs Commission of the Chinese Communist Party. (CNBC)

U.S./CHINA: US Republican lawmakers reintroduced on Thursday a bill that would revoke the permanent normal trading status that Washington has had with Beijing for the past two decades, the latest in a series of efforts by China hawks in Congress to decouple the two countries' economies. Citing China as the reason for the loss of US manufacturing jobs and accusing the country of forced labour, Tom Cotton of Arkansas, Jim Inhofe of Oklahoma and Florida's Rick Scott put forward the "China Trade Relations Act", which would require the US president to approve regular trade relations annually. The bill would give Congress the power to override the president's decision. (SCMP)

CORONAVIRUS: The UN weather agency on Thursday warned that warmer weather in the northern hemisphere should not be used to relax measures to halt the spread of coronavirus. The UN World Meteorological Organization said that warmer weather would not slow viral spread, adding that infections rose in late spring last year and "there is no evidence" that this year would be any different. (FT)

BOJ: MNI BRIEF: BOJ Widens 10-Yr Yield Range To -0.25% to +0.25%

• The Bank of Japan board on Friday decided to maintain its yield curve control policy and left policy rates unchanged but clarified for the first time in the official statement that it tolerates the 10-year yield moving in a range of plus or minus 0.25 basis point from around zero percent. The short-term policy interest rate stands at -0.1% and the long-term interest rate target at around zero percent. The BOJ also said it will not strictly respond to a drop below the lower limit in the day-to-day movement of the 10-year interest rate. The bank also strengthened its operational tool by introducing "fixed-rate purchase operations for consecutive days" to curb higher bond yields - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

SOUTH KOREA: South Korean President Moon Jae-in's support rate dropped back to a record low, as allegations of a land speculation scandal rattled his government and property market policies, according to Gallup Korea survey. Moon's approval rating compares with 38% the previous week. Disapproval rating climbed back to 55%, highest since he took office, from 54%. Of those who disapproved, 37% cited property market policies and 8% cited shortfall to tackle economic issues. Among those who approved, 22% cited Moon's coronavirus outbreak response. (BBG)

CANADA: Health Canada says that the benefits of AstraZeneca's Covid-19 vaccine continue to outweigh the risks, according to a statement. Health Canada says it assessed the available data and determined that the vaccine has not been associated with an increase in overall risk of blood clots. (BBG)

CANADA: The U.S. government is working to help American miners and battery makers expand into Canada, part of a strategy to boost regional production of minerals used to make electric vehicles and counter Chinese competitors. On Thursday, the U.S. Department of Commerce held a closed-door virtual meeting with miners and battery manufacturers to discuss ways to boost Canadian production of EV materials, according to documents seen by Reuters. A source who attended the meeting said there was no indication that the Commerce Department would offer financial incentives for new mines or other supply chain components in Canada. (RTRS)

MEXICO: Mexico's government will absorb Pemex's debt amortization payments this year, which will amount to about $6 billion, CEO Octavio Romero said at an event Thursday. (BBG)

BRAZIL: The Brazilian government expects COVID relief payments to reach 45.6 million families, the presidential press office said in a statement on Thursday. The bill says payments will vary between 150 reais and 375 reais monthly, depending on family size, and will last for four months, beginning in April. (RTRS)

BRAZIL: As Brazil's coronavirus outbreak spirals out of control, the country is facing a dangerous new shortage, threatening to drive fatalities even higher: a lack of staff in intensive care units. Some medical professionals are burned out after months of grueling, soul-sapping work. Others are simply unable to keep up with the endless flow of critical COVID-19 patients pushing the country's healthcare system to the brink. "Intensive care doctors are a commodity in short supply," César Eduardo Fernandes, the president of the Brazilian Medical Association (AMB) told Reuters on Wednesday. "There's no way to meet this brutal, catastrophic demand." (RTRS)

BRAZIL: Brazilian central bank director Fernanda Nechio has resigned for personal reasons, central bank head Roberto Campos Neto said in a statement on Thursday. Campos Neto appointed economist Fernanda Magalhães Rumenos Guardado as the new international affairs and corporate risks director. Guardado will take the helm as soon as her name is approved by the Senate. (RTRS)

RUSSIA: White House press secretary Jen Psaki said President Biden does not regret calling Russian President Vladimir Putin a killer. Asked if Biden had any regrets after his remarks ignited rage from Russian officials, Psaki responded: "Nope. The president gave a direct answer to a direct question." Putin on Thursday responded to Biden's comments with "it takes one to know one." In response to that retort, Psaki said: "Nope. The president gave a direct answer to a direct question." (FOX)

RUSSIA: Russian President Vladimir Putin has offered US President Joe Biden to hold talks on Friday or Monday. The Russian leader will task the Foreign Ministry with considering the possibility of holding such talks. "I wouldn't put this off for too long. I want to go to the taiga on the weekend to get some rest, but we could do it tomorrow or, let's say, on Monday," the Russian president told the Rossiya-24 TV channel. "Please, we are ready at any time convenient for the Americans, I will give the corresponding directive right now to the Ministry of Foreign Affairs [of Russia]," Putin said. (TASS)

RUSSIA: The U.S. State Department is tracking efforts to complete Russia's Nord Stream 2 natural gas pipeline and evaluating information on entities that appear to be involved, U.S. Secretary of State Antony Blinken said on Thursday. "Any entity involved in the Nord Stream 2 pipeline risks U.S. sanctions and should immediately abandon work on the pipeline," Blinken said in a statement, adding the Biden administration is committed to complying with 2019 and 2020 legislation with regards to the pipeline and sanctions. (RTRS)

OIL: Romero said Pemex had made a new 500-600 million barrel discovery and that the company hopes to close 2021 with production close to 2 million barrels per day (bpd). Pemex has seen oil output slide for 16 straight years as its biggest, largely offshore deposits have been extensively tapped. (RTRS)

CHINA

SPECIAL BONDS: China's local governments will kick off the issuance of special bonds this month after the Ministry of Finance disbursed CNY1.77 trillion out of a total CNY3.65 trillion in quotas set this year, the China Securities Journal reported. Funds raised by the bonds will largely be invested in infrastructure, the newspaper said citing analysts. Fiscal spending on improving social security, healthcare and stabilizing the job market grew rapidly in the first two months, as revenue jumped 18.7% y/y as the economy rebounded from last year's pandemic, the newspaper reported citing He Daixin, head of fiscal research at the National Academy of Economic Strategy. (MNI)

MARKETS: The rising 10-year U.S. Treasury bond yield may have little impact on the Chinese market even if it reaches around 2% from the current 1.7%, given the independence of China's monetary policy and the 150 bps-wide interest rate spread between the two economies, said Ming Ming, deputy research director at CITIC Securities in a report. The spread may still be more than 120 bps even if Treasury yields stand at 2%, said Ming. However, the rising yield along with global inflation may cause the yuan to be more volatile, he said. (MNI)

PE/VC: China should encourage private equity firms and venture capitalists to become involved in funding its ambitious carbon-reduction push through selling bonds, providing insurance and raising funds, the 21st Century Business Herald reported citing a report from an institute headed by Ma Jun, an advisor to the People's Bank of China. A green financial system with active private capital participation is essential to achieving carbon neutrality given the target requires about CNY138 trillion of investment, Ma said. (MNI)

OVERNIGHT DATA

JAPAN FEB CPI -0.4% Y/Y; MEDIAN -0.4%; JAN -0.6%
JAPAN FEB CORE CPI -0.4% Y/Y; MEDIAN -0.4%; JAN -0.6%
JAPAN FEB CORE-CORE CPI +0.2% Y/Y; MEDIAN +0.2%; JAN +0.1%

AUSTRALIA FEB, P RETAIL SALES -1.1% M/M; MEDIAN +0.6%; JAN +0.5%

UK MAR GFK CONSUMER CONFIDENCE -16; MEDIAN -20; FEB -23

CHINA MARKETS

PBOC INJECTS CNY10BN VIA OMOS; LIQUIDITY UNCHANGED

The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with rates unchanged at 2.2% on Friday. This keeps the liquidity unchanged after offsetting the maturity of CNY10 billion repos today, according to Wind Information.

• The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.
• The 7-day weighted average interbank repo rate for depository institutions (DR007) fell to 2.1975% at 09:38 am local time from the close of 2.1818% on Thursday.
• The CFETS-NEX money-market sentiment index closed at 38 on Thursday vs 52 on Wednesday. A lower index indicates decreased market expectations for tighter liquidity.

PBOC SETS YUAN CENTRAL PARITY AT 6.5098 FRI VS 6.4859

The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 6.5098 on Friday, compared with the 6.4859 set on Thursday.

MARKETS