A Little Firmer Ahead Of Ueda

Cash JGBs open on the front foot after Thursday’s Tokyo holiday, perhaps with the impulse from Thursday’s U.S. Tsy trade and some pre-Ueda hearing short covering in the driving seat.

• That leaves futures +18, just off best levels of the session, while cash JGBs run little changed to 1.5bp richer, as 7s lead the bid owing to the move in futures. 10-Year JGB yields are essentially sitting on the upper boundary of the BoJ’s -/+0.50% YCC band.
• The swap curve has seen some flattening, with receiver flows aiding the move in JGBs as 10+-Year swap spreads narrow. 10-Year swaps are comfortably off of their YtD peak, operating around the 0.85% mark, while the 10-Year swap spread has pulled back from the YtD wides printed around the Jan BoJ meeting, with market pressure on the BoJ moderating from then (although nowhere near disappearing).
• All over to Ueda, who will appear at the bottom of the hour.