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Continued Local COVID Worry Supports

JGBS

The local COVID situation in Japan & related, seemingly impending, declaration of states of emergency across several regions (including Tokyo) has supported the JGB space as the Nikkei 225 trades heavily again, with the belly of the curve leading (7s richening by a little over 2.5bp on the day). The outperformance in the belly is supporting futures, with that contract last +22 on the day, building on overnight gains.

  • Super-long swap spread spreads sit a touch tighter on the day.
  • The BoJ left the sizes of its 1- to 3- & 5- to 10-Year JGBS as was, with little in the way of meaningful movement in the offer/cover ratios.
  • Elsewhere, local press reports have noted that Japan will maintain its FY25 primary surplus target, while alternate reports played down speculation re: a short-term announcement surrounding a fresh supplementary budget.
  • There is little of note on the local docket on Thursday.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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