Cheaper, Light Local Calendar, Yields Higher In Line With US Tsys

In Tokyo morning trade, JGB futures are holding cheaper but slightly above session lows, -16 compared to settlement levels.

• With the domestic calendar empty today, local participants appear to have been guided by US tsys NY close yesterday and today’s Asia-Pac dealings. Cash US tsys are dealing ~1bp cheaper in today’s Asia-Pac session after yesterday’s bear-steepening. Benchmark yields finished 8-12bps higher on Tuesday after Fed Waller pushed back against aggressive rate cut expectations.
• (Bloomberg) Three Reasons Why BOJ Won’t End YCC by April. Two-thirds of BoJ watchers expect a rate hike by April, with most predicting a shift in that month, according to a survey by Bloomberg News. Our bet is on July. With outlook reports due in April and July, both would seem plausible. Here, we lay out three critical issues that make a July move much more likely. (See link)
• Cash JGBs are cheaper across benchmarks, with the 20-year zone leading (+4.5bps). The benchmark 10-year yield is 4.4bps higher at 0.613% versus Nov-Dec rally low of 0.555%.
• Swaps curve has bear-steepened, with rates 1-3bps higher. Swap spreads are mixed.