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Curve Twists Steeper

JGBS

The JGB curve has seen some twist steepening this morning, with paper out to 20s little changed to 1.0bp richer, while 30s and 40s have seen cheapening of 1.0-1.5bp, perhaps pointing to some worry re: the impact of the impending supplementary budget on long end issuance. Technical steepener interest may also be present, after the likes of the 10-/30-Year year yield spread tagged a multi-month low in recent sessions. Futures held a tight range during the Tokyo morning, hitting the lunch bell 4 ticks below settlement levels.

  • Local headline flow has been relatively light, with Finance Minister Suzuki headlining, noting that Japan will continue to monitor FX markets and that currency stability remains important. Elsewhere, Suzuki noted that the government is still considering the details when it comes to cash handouts in the upcoming fiscal package.
  • The latest round of BoJ Rinban ops revealed the following offer/cover ratios:
  • 1- To 3-Year: 2.06x (prev. 3.07x)
  • 3- To 5-Year: 2.05x (prev. 2.87x)
  • 10- To 25-Year: 2.44x (prev. 3.03x)
  • The downtick in the cover ratios may support the space in early afternoon dealing.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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