Curve Runs Steeper After Wider Bond Cheapening On Wednesday

Wednesday’s shift higher in core global FI yields is applying steepening pressure to JGBs, with the BoJ’s relative lack of control beyond the 10-Year point of the curve providing the ground for such steepening.

• 2s are marginally richer, with the wider JGB benchmarks running 0.5bp richer to 3.0bp cheaper, as the super-long end struggles on the previously outlined matters. Futures deal in a tight range, operating a little above their overnight base, last -18 vs. yesterday’s settlement.
• Local headline flow has been virtually non-existent.
• North Korea’s latest missile test didn’t cross Japanese airspace and has drawn fresh criticism from the Japanese government.