A Touch Softer, With Focus On Offshore Matters

JGB futures sit 6 ticks softer on the day after the elongated weekend in Japan, with the contract gapping a touch lower at the re-open and sticking to a tight range thereafter, as participants look to the broader impetus witnessed in the core global FI space, which is outweighing any sense of local COVID-19 worry.

• Yields are generally a touch higher across the curve, with the short end showing modest underperformance, promoting light bear flattening of the curve.
• The swap curve has been subjected to steepening pressure, leaving swap spreads a little tighter out to 7 years, and a shade wider from 20 years back.
• Local news flow has been limited, with the BoJ leaving the size of its 3-25 Year Rinban operations unchanged.