Bid On Broader Risk Tone, Heavy Offers Remain In Long End Rinban

The combination of an uptick in JGB futures (+11 last) and broader risk dynamic helped to support the belly area of the JGB curve during Tokyo trade on Monday, although continued heavy offers in 10-25+ Year BoJ Rinban ops meant that the super-long end of the curve continued to underperform in afternoon trade, after doing the same in the morning.

• The weekend saw Mainichi sources suggest that Japan's government is considering compiling an extra budget worth ~Y10tn to combat the economic headwinds stemming from COVID-19. The piece went on to note that the gov't has ~Y7tn in remaining reserves that it can deploy, and it is considering issuing (a relatively trivial amount of) bonds to fill the gap.
• PM Suga's favourability in the opinion polls has taken a hit in the last couple of weeks but still remains healthy in relative terms.
• As a reminder, after hours Friday saw the Japanese government note that "the Japanese economy is still in a severe situation due to the novel coronavirus, but it is showing signs of picking up."
• 2-Year JGB supply is due on Tuesday.