HALISTER1: Japanese Bonds Drop on Policy Uncertainty, Long Liquidation: BNP

Japanese Bonds Drop on Policy Uncertainty, Long Liquidation: BNP

(Bloomberg) -- JGBs slide across curve, with 2-year yield up 5 bps to -0.170%, 10-year yield up 5.5 bps to 0.060% and 20-year yield up 4 bps to 0.790%; 5-year yield jumps 6.5 bps to -0.160%, set for biggest gain since May 2013.
  • Long positions in bonds which were created ahead of BOJ’s planned application of negative rates on Feb. 16 are likely being unwound, says Tomohisa Fujiki, chief rates strategist at BNP Paribas, in an interview; says demand at enhanced- liquidity auction was weak and GC repo rate that settles on Feb. 16 hasn’t fallen as much as expected
  • Market volatility will probably remain high due to factors such as uncertainty over policy actions by govt and BOJ: Tokyo-based Fujiki; adds, however, a 10-year yield in 0.05%-0.10% range may attract buying interest next week
  • Yen’s GC govt repo rate down 0.5 bp to 0.075%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Tomohisa Fujiki (BNP Paribas SA)

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