Curve Twists Steeper, Futures Lead Richening

JGB futures tracked the wider core FI impetus observed since Monday’s Tokyo close, which allowed them to extend further away from their overnight base, last +24, while cash JGBs saw some twist steepening, with 40s marginally cheaper on the day (although the super-long end is off session cheaps on the broader bid), while 7s lead the bid on the rally in futures.

• 2-Year JGB supply passed smoothly, with the low-price printing above wider exp., although the cover ratio wasn’t anywhere near as strong, likely owing to the steepness of the domestic curve.
• Elsewhere, Finance Minister Suzuki offered little new in his latest address outside of noting that Japan is watching moves in the financial markets.
• Domestic labour market data provided nothing by the way of meaningful surprises.
• Elsewhere, BBG source reports flagged a 0.1ppt uptick for Japan’s accumulated interest rate, which is used to calculate the country’s debt servicing costs.
• Looking forward, industrial production and retail sales data headlines domestically on Wednesday, with the latest round of BoJ Rinban operations also due.