Flatter, Futures In Tight Range

Spill over from NY dealing and the defensive start to Asia-Pac trade facilitated a small uptick for JGB futures at the Tokyo re-open, with the contract extending through its overnight high before paring back, as wider risk appetite stabilised.

• The downtick in cover ratios observed at the latest batch of BoJ Rinban operations (covering 1- to 3-, 5- to 10- and 25+-Year JGBs) did little to support the space during the afternoon, although ranges remained relatively tight, with futures +7 at typing.
• Wider cash JGB trade saw bull flattening, with no real sense of retracement forthcoming in the super-long end. That leaves the major cash JGB benchmarks little changed to 2bp richer across the curve.
• National CPI data headlines the domestic docket on Friday, with 20-Year JGB supply also due (as noted above, there wasn’t much willingness to try and force some meaningful pre-auction concession in 20s today).