HALISTER1: JGB Reaction Likely Muted Even if BOJ Cuts Bond Buying: MUFJ MS

JGB Reaction Likely Muted Even if BOJ Cuts Bond Buying: MUFJ MS

(Bloomberg) -- Japanese government bond market is unlikely to react significantly even if the Bank of Japan reduces bond purchases at today’s operations following a cut last Friday, says Katsutoshi Inadome, senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.
  • Concerns have receded considerably about BOJ market operations causing ripples in JGB market, so any cut would be absorbed without problem
  • Even another round of reduced bond buying today won’t likely spark bond selling
    • BOJ is scheduled to buy bonds in 1-to-3 and 3-to-5 year zones on Monday
  • JGB market has become resilient to cuts in BOJ bond purchases, as yields are not spiking up nor is the yen appreciating like before
  • NOTE: Kuroda said at Jackson Hole event that yield-curve control is allowing the BOJ to buy fewer JGBs
  • NOTE: BOJ May Keep Cutting Bond Purchases as Debt Market Extends Rally
--With assistance from Chikako Mogi. To contact the reporter on this story: Kazumi Miura in Tokyo at kmiura1@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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8301 JP (Bank of Japan)

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Katsutoshi Inadome (Mitsubishi UFJ Financial Group Inc)

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