Futures Add To Overnight Bid

JGB futures added to their overnight gains during Tokyo trade, with the contract +24 vs. settlement levels at typing. Cash trade saw 7s lead the rally, richening by a little over 2.0bp, indicating that the move may have been futures driven, with the wings of the curve a mere 0.5-1.0bp richer. 30- & 40-Year swap rates dipped a little more than their cash JGB equivalents, narrowing longer dated swap spreads.

• The offer to cover ratios witnessed at the latest round of BoJ Rinban operations were as follows: 1- to 3-Year: 3.05x (prev. 3.43x), 5- to 10-Year: 3.25x (prev. 2.25x). Note that the 5- to 10-Year operations saw a Y25bn reduction in the purchase size, as prescribed in the Bank's quarterly Rinban plan.
• The latest Bloomberg survey pointed to expectations that Japanese PM Suga's government will unveil a fiscal support package totalling somewhere between Y20-30tn in the coming months, in order to garner support ahead of the expected election campaign in the autumn. That is inline with previously touted expectations, although some junior officials within the ruling coalition have pushed for a larger package in recent days.
• 5-Year JGB supply headlines the local docket on Thursday.