Flattening Extends Further

The early bull flattening pressure has extended through the Tokyo morning, with 40s now running 9bp richer on the day, as the impetus from Wednesday’s BoE-driven moves in core global FI markets is felt.

• 10s are still little changed, hovering just below the upper boundary permitted under the BoJ’s YCC
• Futures hugged a narrow range during the morning, hitting the lunch bell +43, consolidating the overnight rally.
• There hasn’t been much in the way of meaningful domestic news flow, outside of continued speculation surrounding potential forms of support for households re: energy prices and schemes to generate inbound tourism for Japan.
• 2-Year JGB supply headlines domestic matters this afternoon (there will be more on that in our upcoming auction preview).