Curve Twist Steepens

Little to really point to when it comes to this morning’s richening in JGB futures, which are last +20 after having a look through this week’s previous peak (pre-BoJ short covering is the easy “explainer”). The move isn’t uniform across the wider curve, with some twist steepening apparent. Paper out to 10s runs 0.5 to 3bp richer (pre-BoJ adjustments are seemingly in play once again), with 10s leading as that measure pulls back below the upper boundary of the BoJ’s YCC parameters, while longer dated paper remains heavy, with 20+-Year benchmarks running 1.5-4.5bp cheaper. This comes after twist steepening on the U.S. Tsy curve on Tuesday, with a local dimension perhaps evident if the likes of 10s/30s flatteners became a popular pre-BoJ play (and are now being unwound pre-meeting).