Tight Start To The Week, Many Cautious Ahead Of BoJ

We didn’t get much in the way of meaningful market moves for JGBs during the first trading session of the week, with participants seemingly somewhat cautious ahead of outgoing BoJ Governor Kuroda’s final monetary policy meeting, even with an overwhelming majority looking for no move from the Bank on Friday (albeit with varying degrees of conviction).

• The major cash JGBs generally traded within -/+1bp of Friday’s closing levels, with 40s presenting the weakest area on the curve. Futures are -8 into the close after breaching their overnight base, but lacked meaningful extension.
• Weekend comments from LDP upper house Secretary General Seko pointed to no reason to change the BoJ-government inflation accord, while he also expects policy continuity under BoJ Governor-in-waiting Ueda (from a “stance” perspective). Seko also outlined a fiscal package that will look to combat inflation (up to Y5tn in size, to be put forth by 17 March).
• Elsewhere, a JTUC survey flagging multi-decade highs for wage hike demands from Japan’s trade unions (released Friday) got some attention.
• Various notable Japanese investment companies weighed in with their views on the JGB market via a Nikkei piece.
• Finally, Japan-South Korea relations seem to be moving in the right direction, although we don’t expect this to be a needle mover for JGBs.
• Looking ahead, Tuesday’s local docket includes 30-Year JGB supply and the latest round of household wage data.