HALISTER1: JGBs Drop on Fading Risks of Rate Cut And Pre-Auction: BofAML

JGBs Drop on Fading Risks of Rate Cut And Pre-Auction: BofAML

(Bloomberg) -- JGBs fall after BOJ decision yesterday to maintain policy and ahead of 20-year auction tomorrow, Shuichi Ohsaki, chief Japan rate strategist at BofAML, says in phone interview.
  • Fading early rate cut possibility by BOJ provide adjustment pressure to short-and medium-term tenor, says Tokyo-based Ohsaki by phone
    • However, BOJ’s bond purchase today could support these short-to-medium term sectors
  • NOTE: BOJ offers to buy 1-3yr, 3-5yr and 5-10yr govt bond, total 1.27t yen today
  • Super-long bonds fall on profit-taking from investors ahead of fiscal year-end and auction concession before 20-year debt sale tomorrow
  • 2-year yield steady at -0.150% and 5-year yield rises 0.5 bp to -0.140%; 10-year yield is little changed at -0.015%
  • 20-year yield climbs 1 bp to 0.470%, 30-year yield adds 2.5 bps to 0.725%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Shuichi Ohsaki (Merrill Lynch Japan Securities Co Ltd)

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