Post for those holding JGBs: BoA/ML & Mizuho expect the whale to buy many less in 2018

The whale is the Bank of Japan, of course

Bank of America Merrill Lynch and Mizuho Securities say BOJ purchases of government bonds may halve next year

• From the current target of 80tln yen to 40tln yen

BoA/ML:

• to about 60t yen this year as 43tln yen worth of BOJ's holdings come due within a year
• & to 40tln yen in 2018

Should BOJ stick to the 80t yen guidance, 10-year yield could slide to -0.4% by the end of next year, compared with the current target of zero

Mizuho:

• estimates 40t yen levels next year and to 30t yen levels in 2020
• Cites rising redemptions
• The expected slowdown will balance out with govt's issuance of new-financing bonds, keeping the amount of bonds in the market stable

via Bloomberg

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