Tokyo To Assess Rinban Tweak

JGB futures meandered within the confines of a narrow range during the final overnight session of last week, showing little in the way of meaningful net direction even as core global FI markets bear flattened, closing -4.

• News that the BoJ would be conducting more frequent rounds of 10+-Year Rinban operations (with both buckets in that zone set to see 3 operations per month vs. the previously indicated 2) seemingly provided some cushion given the moves seen in wider core global FI markets. This comes as the Bank looks to defend its YCC settings after standing pat on Friday, reaffirming its status as the last dove in the room in the major central bank sphere.
• Elsewhere, PM Kishida pointed towards an expectation of support from the BoJ, which means that the upsizing of the Bank’s purchases may have been implemented (at least partially) to help smooth the deployment of the government’s latest fiscal support scheme.
• The tweak to the purchase frequency may support the longer end of the curve in early Tokyo trade, although the move came after upsized/unscheduled Rinban purchases in that area of the curve in recent weeks.
• Monday’s domestic docket is headlined by the latest round of industrial production and retail sales data.