Flatter During Tokyo Morning

The wider risk-off narrative that we have outlined elsewhere allowed JGB futures to reverse their early (modest) Tokyo downtick, although a decisive move through the overnight session highs was not forthcoming, with the contract hitting the bell +22, a touch shy of best levels. Meanwhile, cash JGB trade saw some bull flattening, with the major benchmarks running 0.5-4.0bp richer on the day (10s lagged surrounding lines ahead of this afternoon’s 10-Year JGB auction). Swaps also bull flattened, but swap spreads widened as swaps lagged the move seen in JGBs.

• There wasn’t much of note on the domestic news flow front, with Japanese Finance Minister Suzuki reiterating previously deployed language re: the JPY.
• The aforementioned round of 10-Year supply headlines this afternoon’s docket.