Broader Theme & Surging Nikkei Weigh

JGBs struggled on Monday as futures extended on the weakness seen in the final overnight session of last week, closing -15, with the curve marginally steeper, aided by long end payside flow in the swap space, with swap spreads comfortably wider on the day as a result. The sizes of BoJ Rinban operations covering 1-10 Year JGBs were left unchanged, with little of any real note in terms of offer/cover ratios witnessed within the details.

• The Nikkei 225 also managed to print and close above 30,000 for the first time in decades, adding further fuel to the fire.
• Elsewhere, Japan's preliminary Q4 GDP print was firmer than expected, with the private consumption, net exports and business spending components all topping expectations (business spending the standout of the three).
• The broader dynamic saw participants look through some negative local news, with the weekend seeing a strong earthquake (7.1 magnitude) hit off the coast of Fukushima prefecture. While there was no tsunami threat from the earthquake it has injured several hundred and resulted in damage/widespread power outages across the region.