HALISTER1: INSIDE JAPAN: JGBs Rally on BOJ Purchases, Kuroda’s -0.5% Theory

INSIDE JAPAN: JGBs Rally on BOJ Purchases, Kuroda’s -0.5% Theory

(Bloomberg) -- JGBs gains across the curve after BOJ’s bond purchases while Governor Kuroda says theoretically, there is room to cut rate to minus 0.5%.
  • 2-year yield down 2.5bps to -0.175%, 5-year yield falls 3bps to -0.175%, 10-year yield declines 3.5bps to -0.050%, 20- year yield slides 3bps to 0.430% and 30-year yield down 2.5bps to 0.675%
  • “JGBs yield declines across the curve on strong outcome of BOJ’s bond purchases today, mainly medium tenor of around 5- year,” says Takenobu Nakashima, quantitative strategist at Nomura Securities by phone today
    • Super-long notes rallied on dip-buying demand from investors who maintain their holdings as some bonds mature, he added
  • NOTE: JGBs worth 19.9t yen ($174b) will mature this month, finance ministry data show
  • NOTE: BOJ’s offer to buy JGBs maturing 1-3yr and 5-10yr from secondary market drew less demand than previous operations on March 11, with falling bid-to-cover ratios
  • Finance Minister Aso says he will closely watch government bond market
  • Stiglitz tells Abe now is wrong time to raise Japan’s sales tax
  • USD/JPY rises 0.2% to 113.39, fluctuating around 113.34, conversion line on ichimoku chart
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Takenobu Nakashima (Nomura Holdings Inc)

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