Post-SoO Sell-Off Pared By Lunch

At the Tokyo lunch break, JGB futures are holding an uptick, +4 compared to the settlement levels, after paring the gap lower following the release of BoJ Summary of Opinions for the March MPM.

• (Bloomberg) -- Bank of Japan board members discussed the need to stay cautious at a policy meeting last week, where the bank ended its massive easing program with Japan’s first interest rate increase since 2007, according to a summary of opinions from the gathering. (See link)
• (Bloomberg) -- The Bank of Japan still expects inflation in coming years to be around 2% which “means we don’t see any interest rate hike necessarily so means we will keep the monetary situation very accommodative for a while,” Assistant Governor Tokiko Shimizu said at an event in Hong Kong. (See link)
• The cash JGB curve has twist-flattened, pivoting at the 3s, with yield movements bounded by +0.5bp (1-year) and -2.4bps (40-year). The benchmark 10-year yield is 0.8bp lower at 0.717% versus the YTD high of 0.801%.
• Results of the BoJ‘s Rinban operations covering 3- to 25-year JGBs are due soon.
• Swap rates are lower, apart from the 20-30-year zone (+1.8bps). Swap spreads are tighter out to the 10-year and wider beyond.