Will The BoJ Tweak Rinban Purchases?

JGB futures added 9 ticks in overnight trade, with Tokyo traders set to assess the implications of the defensive posturing that was seen in U.S. hours on Monday.

• In local news, a Nikkei piece has noted that "Japanese Prime Minister Yoshihide Suga's government is poised to declare a state of emergency for the second time in the COVID-19 pandemic, acting as soon as Thursday to combat surging cases in the Tokyo area. The emergency would cover the capital as well as the neighboring prefectures of Kanagawa, Saitama and Chiba and is expected to last roughly a month… Separately, the four governors agreed on Monday to call on residents to avoid unnecessary outings after 8 p.m. Bars and restaurants will be requested to close by that time, starting this Friday. Schools will remain open. The request for shorter business hours will remain in effect until Jan. 31." In addition to this, the Asahi has suggested that Japan is mulling the suspension of all foreign arrivals to the country as it looks to fight off the virus.
• 3-Month bill supply and 1-10 Year BoJ Rinban operations are due today. Re: the latter, there are suggestions that the BoJ may lower the amount of 1-3 Year JGBs that it wishes to purchase after it trimmed the lower and upper bounds of purchases under each 1-3 Year operation by Y50bn (to Y300bn and Y600bn respectively) in its January Rinban outline (the previous purchase size in that particular bucket stands at Y500bn).