Modest Bid For Futures, BoJ Rinban Plan Eyed

JGB futures benefitted from the previously outlined richening in U.S. Tsys during overnight dealing, eventually closing +7 vs. Tokyo settlement levels.

• Prelim. industrial production data headlines the domestic economic docket on Thursday.
• Note that the BoJ will release its quarterly Rinban plan after hours today. Some have pointed to a relatively high likelihood of the BoJ upping its purchases covering bonds with over 10 years until maturity (via frequency and/or size), in an effort to stave off pressure/attacks on its 10-Year yield targeting mechanism, with notable foreign selling of both cash bonds and JGB futures observed in recent weeks. A reminder that the BoJ has relatively less control of the JGB curve beyond the 10-Year point, given lower purchase amounts in that area and lack of a yield target beyond 10s.