Futures Back To Overnight Lows After Morning Strength Reversed

At the Tokyo lunch break, JGB futures are weaker, -18 compared to settlement levels, and back near overnight closing levels.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined labour market and IP data, which came in slightly stronger or in-line with market expectations.
• Cash US tsys are flat to 1bp cheaper across benchmarks in today's Asia-Pac session after giving early strength.
• The cash JGBs are generally cheaper, led by the belly, with yields 0.6bp lower (2-year) to 2.5bps higher (futures-linked 7-year). The benchmark 10-year yield is 2.3bps higher at 0.695% versus yesterday’s low of 0.638%. The 2-year JGB sits unchanged at 0.023% after yesterday’s poorly received supply.
• Swap rates are little changed out to the 30-year, with the 40-year rate 2.3bps higher. Swap spreads are tighter out to the 30-year.
• Bloomberg reports that a Japanese power company sold its first floating-rate bonds, seeking to attract investors concerned about rising rates with the rare deal as Bank of Japan uncertainty mounts. (See link)