Curve Twist Steepens, Futures Narrow

Twist steepening was at the fore during the Tokyo morning, with 40s incrementally cheaper on the day, while the remainder of the JGB benchmarks run 0.5-1.0bp richer across the curve. Futures briefly extended through the top of their overnight range before the subsequent cheapening in the U.S. Tsy space allowed the contract to edge away from best levels, hitting the bell +4. There hasn’t been much in the way of notable local headline flow to note, while local data had no impact on the space (as is the norm).

• We saw comments from Japanese Finance Minister Suzuki, who flagged the government’s strong concerns re: the Omicron strain of COVID, pointing to the need for swift passage of the supplementary budget measures and stability in the FX market.
• 2-Year JGB supply headlines this afternoon.