The big news overnight came from the BoJ as Kuroda committed to 2% inflation and increased long end JGB purchases. This lead to a 2.5% drop in the Yen, 2.2% rally in the Nikkei and 40-year bonds rallied 24 bps (now 1.34% compared to US 30-year yields of 3.02%).
In the US, Initial Jobless Claims came in worse than expected (385k vs. 353k) and continuing claims rose to 3063k (3050k expected). This has 10-year notes up a quarter point (1.78%) and MBS trading about a + wide to duration hedges. The news from Japan should be a net positive for Treasuries and MBS as Japanese investors look to gain yield by investing internationally. The big news for the US markets will be out tomorrow with expectations of +190k in payrolls and unemployment to hold steady at 7.7%. At 11:00 AM EST there is a UST buyback in the 2/36-2/43 sector of $1.25-1.75 Billion and Janet Yellen speaks at 5:00 PM EST.
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