Flatter Ahead Of 20-Year JGB Supply

Wednesday’s U.S. Tsy bid spilled over into this morning’s JGB trade, although the modest cheapening observed in U.S. Tsys during early Asia-Pac hours dampened post-open activity in paper out to 10s.

• This left futures coiling around late overnight session levels, hitting the bell +9. Meanwhile, the major cash JGB benchmarks were little changed to ~3.5bp richer, with 30s outperforming on the curve.
• On the fiscal front, a draft observed by RTRS revealed that “Japan's ruling Liberal Democratic Party will urge the government to top up aid to soften the blow from rising fuel costs, including by adding jet fuel to the target for subsidies. The LDP will look into measures beyond the relief package currently being crafted by the government as rising raw material costs could persist and weigh on the economy.”
• 20-Year JGB supply headlines this afternoon, with no meaningful pre-auction underperformance evident in 20s this morning.