Flatter

JGB futures drifted lower in the Tokyo afternoon, last -6, with the cash curve seeing some light bull flattening vs. Monday's close. A solid enough, albeit unimpressive, round of 20-Year JGB supply saw a fairly steady cover ratio, narrower tail vs. prev. auction and a low price that comfortably topped broader dealer exp. (proxied by the BBG dealer survey). The matters flagged in our auction preview (limited relative value appeal, attractive offshore bond yields and a lack of impending BoJ purchases covering the zone) seemed to limit overall demand, although appetite for carry ahead of the Japanese holidays in early May & a lack of long-dated JGB issuance over the next 3 weeks would have aided takedown. Super-long JGBs were a touch firmer in the wake of the auction after outperforming during the Tokyo morning.

• BoJ Rinban operations headline the local docket on Wednesday.