BoJ slightly increased its purchases of 5–10yr JGBs – RBC CM

Adam Cole, Research Analyst at RBC Capital Markets, notes that the BoJ slightly increased its purchases of 5–10yr JGBs (JPY450bn from JPY410bn at the previous operation).

Key Quotes

“Although not a large change, the increase is being taken as a signal that the BoJ is not yet prepared to lift its target for 10yr yields from zero and is probably looking to hold rates below 0.1% (currently 0.08%). This should not be surprising. Given Governor Kuroda’s mantra of “no incremental policy changes,” the BoJ is very unlikely to change the yield target so soon after introducing it (September). Dec CPI inflation came in at 0.3% y/y (consensus 0.2%). Excluding fresh food (the BoJ’s core measure), prices fell 0.2% y/y.”