Flatter In Sympathy With Tsys

The JGB curve has twisted flattened in early Tokyo trade, in sympathy with the post-FOMC move in U.S. Tsys. The major cash JGB benchmarks run 0.5bp cheaper to 2bp richer across the curve, pivoting around 5s, with super-long JGBs pulling further away from the recently printed cycle cheaps.

• Futures have railed a touch on the move, last +14, although 10s aren’t providing the BoJ with much in the way of respite when it comes to a move away from the upper boundary of the Bank’s YCC mechanism.
• Eyes are firmly on the previously outlined BoJ decision, as the market looks through Japanese PM Kishida flagging a possible further loosening of COVID-related border restrictions.