BOJ: Upcoming meet remains in focus - BBH

Research Team at BBH, suggests that although the BOJ meets later in a couple of weeks, it remains in focus as the balance of speculation has shifted in recent days to the possibility the BOJ shifts the composition of its bond purchases to facilitate a steepening of the yield curve. 

Key Quotes 

“This would ostensibly involve purchasing less long-dated JGBs.  In anticipation, the yield curve (2 yr-30 yr/40yr) has steepened recently.  On Thursday, the MOF will meet with investors to assess the demand for 40-year bonds.  It is thought the MOF may increase its sales by around JPY400 bln to JPY2 trln.  Between the MOF and BOJ, there appears to be a willingness to accept higher long-term yields.

The dollar's momentum against the yen that had propelled the greenback above JPY104 last week has eased.  It remains within yesterday's range, which was within last Friday's.  Support is seen in the JPY102.60-102.80 band.”