Belly Of Cash Curve Cheaper, Q1 GDP Revised Lower

JGB futures are weaker but well off session lows, -24 compared to the settlement levels.

• Outside of the previously outlined Tankan Report and Mfg PMI, there hasn't been much in the way of domestic drivers to flag.
• (MNI) Japan's Q1 economy contracted at a faster pace than previously estimated as public investment was revised lower, updated data released by the Cabinet Office showed on Monday. The economy contracted 0.7% q/q, or an annualised -2.9%, compared to previous estimates of -0.5% q/q and an annualized -1.8%.
• Cash JGBs are 1bp richer to 2bps cheaper, with the belly of the curve underperforming. The benchmark 10-year yield is 1.1bps higher at 1.068% versus the cycle high of 1.101%.
• The move away from morning cheaps has been assisted by a bull-steepening in US tsys in today’s Asia-Pac session. Cash benchmarks are currently 1-3bps richer after being as much as 2bps cheaper in early dealings.
• (Bloomberg) “The BoJ will probably continue to purchase government bonds to some degree long after it kicks off quantitative tightening this summer, according to a former BOJ executive director.” (See link)
• The swaps curve is little changed, apart from the 40-year which is 3bps higher. Swap spreads are mixed.
• Tomorrow, the local calendar will see Monetary Base data alongside 10-year supply.