10-Year Supply Goes Poorly

It seems that desks were a little complacent re: the prospects surrounding the smooth takedown of today's 10-Year JGB supply, with the average price only just matching the broader expectations for the low price (per the BBG dealer poll), as the cover ratio slid to the lowest witnessed at a 10-Year auction since '15. Elsewhere, the tail widened vs. the previous auction. Crimped 10-Year ranges since the BoJ's March decision, questions over market functioning and a lack out outright/relative value appeal likely hampered takedown today.

• Futures softened in the wake of the auction results, briefly printing below yesterday's settlement level, before recovering from fresh session lows to last trade +1 on the day, while cash JGBs sit little changed to 0.5bp cheaper across the curve.
• Elsewhere, the Asahi suggested that PM Suga is likely to call a snap election in the Autumn, after the end of Paralympic games. The report also suggested that the government is considering compiling a new stimulus package ahead of the snap election.
• Household spending data headlines the local economic docket on Friday.