Cash Bond Curve Twist-Steepener Ahead Of BoJ Rinban Operations

In Tokyo morning trade, JGB futures have reversed overnight strength to be weaker, -12 compared to settlement levels.

• (Bloomberg) “Most Bank of Japan watchers have kept their views on the trajectory of interest rates intact despite the historic upheaval in markets during the past few days, although they note rising risks of policy backtracking.”
• “Some 65% of 34 economists see the policy rate rising from the current 0.25% by the end of the year, according to a Bloomberg survey conducted Tuesday.”
• Cash US tsys are little changed in today’s Asia-Pac session, after yesterday’s sharp sell-off.
• The cash JGB curve twist-steepened, pivoting at the 20s, with yields 1bp lower to 2bps higher. The benchmark 10-year yield is 0.4bp higher at 0.905%, near the middle of the 0.74-1.10% range it has traded in over the past week.
• The swaps curve has bear-steepened, with rates flat to 1bp higher. Swap spreads are mixed.
• Today, the local calendar will see Leading and Coincident Indices alongside BoJ Rinban Operations covering 1-5-year and 10-25-year JGBs.