Firming Theme Holds Through The Morning

JGBs held firm through to the lunch bell, with the bull flattening impetus intact, as the major benchmarks hit the lunch break flat to 5bp richer, while the previously alluded to BoJ Rinban purchase details eventually helped to underpin the 3- to 10-Year zone of the curve (after some two-way flow post purchase announcement), as futures hit the break +71, just shy of their morning peak (once again, after two-way gyrations surrounding the Rinban purchases). Moves stood out against swaps, with the swap curve twist steepening, resulting in mixed swap spread performance (little changed in the front end of the curve, with a widening theme then extending the further out the curve you look).

• The lunch break has seen RTRS note that “Japan's Ministry of Finance plans to sell Y190tn worth of JGBs in the fiscal year beginning April 1, with cuts in the amount of short-term debt sold, showed a draft of the plan. The plan would compare to the previous year's Y198.6tn.” RTRS cited a draft of the plan that they have seen as the source of the figures.
• Elsewhere, PM Kishida has flagged a desire for expedited private sector pending, alongside scheduling a special session of the council on economic and fiscal policy for early next year.
• Meanwhile, the offer to cover ratios seen in the latest round of BoJ Rinban operations was somewhat subdued (3- to 5-Year: 1.72x, 5- to 10-Year: 2.04x).