7s Lead The Bid On Futures Uptick, 30-Year JGB Supply Sees Soft Cover

JGB futures generally followed the broader ebb and flow of wider core global FI markets during the Tokyo morning, although the bid has been a little stickier during the afternoon. Still, JGB futures have failed to test early Tokyo highs, last +19 vs. Wednesday’s settlement. Cash JGBs are little changed to ~2bp richer, with 7s maintaining their early outperformance, aided by the bid in futures, while 20s provided the weakest point on the curve.

• BoJ board member Noguchi stuck to the wider dovish script provided by the central bank, underlining the need for continued easing, while BoJ Exec. Dir. Uchida flagged the positives surrounding the BoJ’s ultra-loose policy settings.
• The latest round of 30-Year JGB supply saw firm enough pricing, with the low price providing a modest beat vs. wider expectations, although the cover ratio softened at the margin, holding comfortably below the 6-auction average (3.29x). It would seem that the previously flagged worry re: continued market vol. and spill over from offshore bond market gyrations stood in the way of wider interest at today’s auction.