JGBs jump at close after long weekend ahead of BoJ’s July policy meeting minutes

The Japanese government bonds jumped at close on Monday after returning from a long weekend holiday, following closure for Autumn Equinox as investors await the release of the Bank of Japan’s (BoJ) minutes of the July monetary policy meeting, today by 23:50GMT for further direction in the bond market.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 20 basis points to -0.240 percent, the yield on the long-term 30-year suffered nearly 2 basis points to 0.337 percent and the yield on short-term 2-year slumped 16 basis points to -0.319 percent.

Regarding the recent repo tightness, Fed’s Daly opined that “we didn’t have a liquidity problem in the system. We had a distribution of that liquidity. And one of the things that was surprising is that institutions didn’t trade that liquidity with each other”, OCBC Treasury Research reported.

Further, Williams opined that increasing transparency is a key focus of the Fed and the central bank will “continue to monitor and analyse developments closely” and “assess the implications for the appropriate level of reserve and time to resume organic growth” of the Fed’s balance sheet, the report added.

Separately, Bullard called for “taking out insurance” on rate cuts and favoured creating a standing repo facility, OCBC further noted in the report.

Meanwhile, the Nikkei 225 index closed tad up at 22,098.84, while at 06:00GMT.