HALISTER1: JGBs Drop as BOJ Nakaso’s Remarks Dim Easing Prospects: BofAML

JGBs Drop as BOJ Nakaso’s Remarks Dim Easing Prospects: BofAML

(Bloomberg) -- JGBs fall in afternoon session as remarks by BOJ’s Nakaso damp speculation of further monetary easing by central bank, says Shuichi Ohsaki, chief Japan rates strategist at Bank of America Merrill Lynch.
  • JGBs had been bought in morning session on expectations for a cut in negative rates: Tokyo-based Ohsaki; says yield curve also shifted downward, led by super-long end yields that fell on back of strong outcome of this week’s 30-year note sale
  • While yield curve is likely to see pressure to steepen toward BOJ’s meeting later in Sept., yields are unlikely to rise sharply due to continued bond purchases by BOJ and redemptions this month
  • NOTE: Nakaso says BOJ to decide if necessary to adjust current framework
  • Today’s sale of 5-year JGB notes was solid: Ohsaki
  • NOTE: Japan’s 5-year bond auction draws lowest bid/cover in 11 months
  • Ten-year yield up 2 bps at -0.040%, 20-year yield up 3 bps at 0.385% and 30-year yield up 3.5 bps at 0.445%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Shuichi Ohsaki (Merrill Lynch Japan Securities Co Ltd)

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