Move Away From Richest Levels Holds, Could See Fresh Pressure In Afternoon

JGBs moved off Tokyo cheaps into the lunch break, after the previously covered vol. surrounding the Nikkei report which suggested that BoJ Deputy Governor Amamiya had been tapped to succeed outgoing Governor Kuroda. While Amamiya is considered the most dovish of the three assumed candidates for the role, the Nikkei piece reiterated that policy normalisation will be the key focus for the next Governor (which allowed the initial richening to be unwound). JGBs may be pressured in the early rounds of afternoon dealing after Deputy Chief Cabinet Secretary Isozaki noted that there is no truth to the Nikkei report (after Finance Minister Suzuki said he hasn’t heard such discussions, although he conceded that he is “out of the loop” on the matter). JGB futures hit the lunch bell -26, while cash JGBs were flat to 2bp cheaper, a touch shy of worst levels of the day.