Contained, 5-Year Supply Tepid At Best

JGBs futures drew support from the bounce in U.S. Tsys in the Tokyo morning, with yields hovering around unchanged levels, before a less than convincing cover ratio in the latest round of 5-Year JGB promoted very modest weakness in the space. Futures -5, yields sit -/+0.5bp across the curve.

• To recap auction specifics, the low price of the 5-Year auction met dealer estimates, as proxied by the BBG dealer poll, with the width of the price tail holding steady when compared to the previous auction. However, the cover ratio eased, perhaps pointing to some worry re: the upcoming JGB issuance schedule, given the fact that today's auction cleared around 1.0bp cheaper than the prior auction, but generated a softer cover.
• Elsewhere, Nikkei sources noted that "Japan's government plans to cover compensation for any health problems that may arise here from coronavirus vaccines, seeking to ensure a stable supply from foreign manufacturers as global competition intensifies."
• National CPI, flash PMIs and the latest round of BoJ Rinban purchases headline locally on Friday.