Curve Steeper, Again

JGB futures consolidated overnight losses during the Tokyo morning, hitting the bell -10, after sticking within a tight range.

• Cash JGBs are flat to ~2bp cheaper, steepening, with 30s providing the weak point on the curve. 10s are little changed on the day, with participants seemingly unwilling to chase yields higher given the BoJ’s recent pre-emptive action to enforce the top end of its permitted 10-Year JGB yield trading band.
• Today’s BoJ Rinban operations provided the following offer/cover ratios:
• 1- to 3-Year: 2.96x (prev. 2.91x)
• 5- to 10-Year: 1.96x (prev. 1.96x)
• 25+-Year: 5.02x (prev. 3.15x)
• The uptick in the ops covering super-long JGBs, coupled with the lack of change in the remaining offer/cover ratios, may provide some steepening impulse in early Tokyo afternoon dealing.
• Comments from BoJ Kuroda didn’t include any fresh points of note, with the same holding true when it comes to comments made by Japanese Finance Minister Suzuki.