Bond Futures Continue to Rise, Bank of Japan’s Upper Limit Battle Takes a Break, Long-Term Interest Rates Flat – Bloomberg

In the bond market, the futures continued to rise following the sharp rise in the bond market following the policy management policy was left unchanged at the monetary policy meeting on the 18th. Newly issued 10-year government bond yields are trading below the Bank of Japan’s allowable upper limit. The deterioration of the government bond market and the distortion of the yield curve have not been resolved, and there is still concern that selling in anticipation of the Bank of Japan’s yield curve control (yield curve control, YCC) will recur.

Takashi Yamawaki, head of fixed income research at JP Morgan Securities, said, “The yen interest rate market is heavily short (short position), and short cover (buyback) pressure is likely to continue for the time being. is likely to intensify.”

Kazuhiko Sano, chief bond strategist at Tokai Tokyo Securities, and speculators will also withdraw for the time being, and the selling once morest the BOJ will weaken for the time being. pointed out. Many people believe that April’s change in the governor of the Bank of Japan will be an opportunity to revise policy, and say, “Attacks anticipating a change in the YCC will become more active once more.”

New 10-Year Bond Yield Flat at 0.415%

Long-term JGB futures for March started trading at 146.9 yen, down 4 yen from the previous day, but temporarily rose to 146.59 yen as buying dominated.

At 10:10 a.m., the Bank of Japan announced a limit price operation to buy unlimited 10-year government bonds at a yield of 0.50%. At the monetary policy meeting held on the 18th, the Bank of Japan decided to maintain the current monetary policy and expand the pooled collateral funds-supplying operation. On the 23rd, we will implement a pooled collateral fund-supplying operation with a loan period of 5 years.Noticebottom.

20-year bond auction

• Planned issuance amount is regarding 1.2 trillion yen
• Keiko Onoki Senior JGB Strategist at Daiwa Securities
  • Absolute interest rate levels do not seem to make buying difficult, but the liquidity of super long-term bonds is still low
  • We would like to consider our bidding stance with a yield level of 1.35-1.40% in mind.
  • If the adjustment does not proceed and the rate falls below 1.35%, the bid will likely be low, with the tail flowing.
• Remarks: Past auction results for 20-year JGBs

background