Futures At Session Highs At Lunch

At the Tokyo lunch break, JGB futures have pushed to Tokyo session highs, +19 compared to the settlement levels.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined National CPI, which printed in line with expectations.
• According to MNI’s technicals team, JGB futures took out support at 146.50 yesterday, slipping to 146.26, just above the Aug 3 low. For now, the bear trigger at the 146.11 low on the continuation contract is yet to be tested, with downside momentum likely to pick up on any break of that mark. The previous buy-on-dips theme has faded, but any return higher would target the May 12 high of 149.21. Clearance of these levels would highlight an important break.
• Cash JGBs are mixed across the curve, with yields 0.4bp lower to 1.6bp higher (40-year). The benchmark 10-year yield is 0.1bp lower at 0.645%, above BoJ's YCC old limit of 0.50% but below its new hard limit of 1.0%.
• Swap rates are -0.2bp to -1.0bp. Swap spreads are narrower across the curve.