Fixed Income Commentary

Post-NIRP outlook for repo rates and changing trading motives

• Repo rates depend on BoJ current account structure as well as relative money market rates and JGB supply/demand

• Move to two-tiered reserve structure would most likely leave repo rates trading slightly below TONA (0% - 0.1%)

• Focus on changing trading motives for regional banks and life insurers as well as for larger participants such as securities companies, megabanks, and investment trusts