Firmer, Despite Slightly Weaker Than Expected 5-Year Supply

JGB futures traded back to unchanged levels in early afternoon dealing, unwinding the morning bid, with little support seen on the back of a 5-Year JGB auction which was probably a little softer than most expected, but not outrightly weak. To recap, the auction saw the low price miss broader expectations (which stood at 101.05, per the BBG dealer poll), indeed the average price was in line with the expectations for the low price, while the tail widened marginally and cover ratio edged lower.

• Futures then regained some composure and finished +4, with long end outperformance at the fore in cash trade. Swap spreads were tighter out to 7-Years, but wider from 10-Years out.
• A widening of the regions covered by the Japanese state emergency is set to be officially announced later today.
• Local PPI data & BoJ Rinban ops are due on Thursday.