BOJ: Rinban Purchase Offer
Aug-02 01:14
The BoJ offers to buy a total of Y1.85tn of JGBs from the market:
- Y425bn worth of JGBs with 1-3 Years until maturity
- Y450bn worth of JGBs with 3-5 Years until maturity
- Y675bn worth of JGBs with 5-10 Years until maturity
- Y200bn worth of JGBs with 10-25 Years until maturity
- Y100bn worth of JGBs with 25+ Years until maturity
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BOJ: Fixed Rate Purchase Offer
Jul-03 01:10
The BoJ offers to buy an unlimited amount of 5- to 10-Year JGBs at a fixed rate of 0.50%.
JGBS: Futures Holding Richer, Takan Survey Stronger, PMI Mfg Weaker
Jul-03 00:50
JGB futures are slightly higher than the post-Tokyo closing level ahead of the weekend, +10 compared to settlement levels, after initially weakening at the open of Tokyo trade.
- Sentiment among Japanese large manufacturers improved for the first time in seven quarters during the three months to June thanks to eased supply constraints. The main index for sentiment among large manufacturers was +5, compared with +1 in March and economists' forecast for +3, according to the BoJ's quarterly Tankan corporate survey. Big companies plan to increase their capital expenditure by 13.4% for the fiscal year ending March 2024, compared with plans for a 3.2% increase projected in the previous survey.
- Importantly, Japanese companies also see inflation above 2% all the way out for the next five years.
- The Jibun Bank Mfg PMI index falls to 49.8 from 50.6 in May. The output and new orders sub-indices both declined.
- Cash JGBs are richer across the curve out to the 30-year zone, with the futures-linked 7-year zone leading (1.2bp richer). The benchmark 10-year yield is 0.6bp lower at 0.395%, below the BoJ's YCC limit of 0.50%.
- Swap rates are slightly lower along the curve with the 40-year leading. Swap spreads are mixed.
JPY: USDJPY Moving Lower Post Tankan Data
Jul-03 00:16
There has been little movement in USDJPY in reaction to the better than expected Q2 Tankan data but it is trending lower. It was trading around 144.36 prior to the data and then spiked to 144.43 but is now around 144.30. The yen is slightly stronger against the euro at 157.42. The survey showed USDJPY expected to be 132.43 in FY23/24 and EURJPY 140.11.
- Importantly, firms expect inflation to moderate to 2.6% in 1 year and then 2.2% in 3 years.
- All series improved on Q1 with large companies exceeding expectations. Large manufacturing rose to 5 from 1, first improvement in 7 quarters, and non-manufacturing to 23 from 20, highest since Q2 2019. Manufacturers sentiment was helped by costs peaking, being able to pass on higher costs and a rebound in auto production. The outlook improved too for large and small companies.
- Large firms expect capex this fiscal year to rise 13.4%, more than expected, whereas small ones only expect 2.4%.
