Curve Steepens Into 40-Year Supply

JGB futures nudged lower in the Tokyo morning, with little in the way of meaningful headline flow apparent. That allowed the contract to undo the bulk of its modest overnight gains, hitting the bell +2 vs. yesterday’s settlement levels. Sun-10-Year paper was little changed on the day, although 10+-Year paper runs 1.5-4.0bp cheaper on the session, with the curve running steeper, likely making room for this afternoon’s 40-Year JGB supply, which provides the focal point of today’s domestic docket. Swap spreads are narrower across the curve.

• In local matters, services PPI data met expectations, while the stale minutes from the BoJ’s June meeting was inconsequential for markets, as expected.