Firmer & Flatter On Global Impulse

JGB futures were off best levels at the closing bell, although comfortably firmer, +57. Cash JGBs are flat to ~11bp richer, with the early flattening extending, aided by receiver side flows in swaps as swap spreads sit flat to tighter on the day. 10-Year JGB yields now sit at the lowest level observed since the BoJ’s surprise YCC tweak back in December (0.31%), nearly 20bp off the YCC cap.

• Global factors were at the fore today, with the moves from U.S. policymakers re: stemming the fallout from the failure of SVB front and centre. The introduction of a new Fed funding scheme for deposit taking institutions and the decision to make depositors at SVB (and another failed bank) whole provided the focal points.
• Locally, the junior ruling coalition partner, Komeito, indicated that it will be seeking several trillion JPY of stimulus spending, focused on supporting families with children and in a bid to reduce LNG prices.
• The latest quarterly BSI survey provided a deterioration in sentiment for large firms.
• Tomorrow’s domestic data slate is empty, although we will get the latest 5-Year JGB auction. That should leave the broader tone at the fore for most of Tuesday’s session.