Weaker, Several Potential Sources Of Pressure

JGB futures hit the lunch break 13 ticks below settlement levels, which comes on the back of the light pressure seen in core FI during NY hours, while some continue to speculate re: the potential for adjustments to the BoJ's JGB purchase plan for the month of February (which will be released after hours today).

• There was also some focus on the summary of opinions from the BoJ's January meeting, in which one member of the BoJ board stressed that more flexible management of the Bank's YCC scheme is vital, while one board member also said the same about the Bank's ETF purchases. These are of course assumed to be the central areas in the BoJ's ongoing monetary policy review, with the results set to be released in March. A reminder that local press reports recently suggested that the BoJ will tolerate a wider trading band around the 0% centre point re: 10-Year JGB yields.
• Paying flows in swaps also seemed to aid the momentum, with longer dated swap spread widening seen during the morning.
• Elsewhere, the latest round of BoJ Rinban operations saw purchases sizes that were in line with the previous rounds for each respective bucket, while the offer/cover ratios were as follows:
• 3-5 Year: 2.64x (prev. 3.29x)
• 5-10 Year: 2.91x (prev. 2.61x)
• 25+ Year: 6.12x (prev. 5.68x)