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Curve Runs Steeper

JGBS

The combination of Wednesday’s weakness in core global FI markets and the BoJ’s relative lack of control over yields beyond the 10-Year point allowed the JGB curve to steepen on Thursday, with the major benchmarks running 1bp richer to 3bp cheaper, pivoting around 3s. JGB futures print -17, operating in the lower end of their overnight range during Tokyo hours.

  • The super-long end has recovered from worst levels of the session, with 10-Year JGB yields hovering around the upper limit of the BoJ’s permitted trading band.
  • A liquidity enhancement auction for off-the-run 5- to 15.5-Year JGBs went well.
  • The latest round of regional assessments from the BoJ saw it upgrade its economic assessment of 1 region, while the remaining 8 assessments were unchanged.
  • Participants now await an address from BoJ Governor Kuroda after the conclusion of the branch managers’ meeting.
  • Looking ahead to Friday, household spending and wage data provide the highlights of the domestic docket.
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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