JGBS: Futures Quickly Pare Uptick That Followed Latest BoJ Purchase Plan Report
Jun-06 09:57
JGB futures add just under 20 ticks to fresh overnight session highs of 139.64 after BBG sources report that the “BoJ is said to consider a smaller reduction in its bond buying”, before fading back towards pre-headline levels (~139.50 last).
- The BBG report suggests that the range of bond purchase reductions under consideration lies between JPY200-400bln per quarter, with a focus on JPY200bln.
- This is in line with general assumptions based on the current reduction pace (Y400bln) and official communique on dealer suggestions (JPY200bln)/prior source reporting.
- The lack of new information in the story helps explain the limited reaction in JGB futures and quick paring of the rally. USD/JPY reacts similarly, with spot pressuring the top-end of the daily range, but stopping short of any significant breakout.
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