No Rinban Tweaks, Futures Rally On Offshore Impulse

JGB futures showed nothing in the way of meaningful reaction to the BoJ’s unveiling of its Q3 Rinban plan, with the schedule providing no changes to the frequencies and size of the operations. There was a very modest blip lower in futures in lieu of the release, but the wider core FI bid supported the contract, which ultimately recovered from overnight lows to finish the post-Tokyo session +25.

• A quick reminder that Thursday saw the long end of the JGB curve outperform on the back of speculation surrounding the potential for the BoJ to lift the size/frequency of Rinban purchases covering JGBs with over 10 years to maturity, as some believed that the Bank would look to offer further protection to its current YCC settings.
• Onshore participants will weigh up the lack of movement from the BoJ re: Rinban vs. the impetus from the offshore FI bid in early Tokyo trade.
• Note that the head of the Japanese Bankers Association has stressed that the BoJ should more closely assess the adverse impacts of its monetary policy settings given the recent fall in the JPY.
• Tokyo CPI data (with the 3 headline Y/Y metrics expected to rise by 0.1-0.2ppt vs. prior readings), the quarterly Tankan survey (where steady to modest improvements are seen for the large firm figures) and the latest labour market report (no major changes seen) headline the domestic docket ahead of the weekend.