Bull Flattening Extends Into The Bell

Richening in the long end of the cash curve supported JGB markets in the Tokyo morning. The smooth enough absorption of 20-Year JGB supply allowed the bid to develop during the early part of the Tokyo afternoon, with 30- & 40-Year paper richening by ~5bp on the day come the close, while swaps generally widened vs. JGBs across the curve. Futures finished +16 as the bid extended into the close, unwinding their overnight weakness and more.

• •Local headline flow was extremely limited to non-existent, with the latest round of weekly international security flow data revealing ~Y750bn of net purchases of Japanese paper by foreign investors (which partially unwinds the large net selling seen in the previous week and coincides with the topping out of in JGB yields).
• •On the corporate supply front headlines flagged that Toyota is set to price the largest sustainable bond deal seen to date in Japan (Y130bn).
• •The latest BSI survey and BoJ Rinban operations headline locally on Friday.