Bear Steepening, 10-Year Yields Eyed

Continued weakness in the U.S. Tsy space is spilling over into JGBs after the long Tokyo weekend, with the JGB curve bear steepening as the major benchmarks trade little changed to 2bp cheaper on the session (note there was a degree of weekend catch up and hope re: increased Japanese fiscal stimulus also embedded into price action). 10-Year JGB yields are now less than 1bp away from the 23bp mark that triggered pre-emptive action from the BoJ via fixed rate JGB operations to enforce the upper end of its permitted -/+0.25% yield trading band back in February. Futures operate a touch of worst levels of the session, last -22, with the February cycle low (149.80) providing key technical support.