Futures Coil Into Japanese FY End, Curve Bull Flattens

JGB futures traded in a contained manner during the Tokyo morning, dealing either side of unchanged, with participants seemingly happy to pause for breath after yesterday’s volatility, in what is the final Tokyo trading session of the Japanese FY. The super-long end of the cash JGB curve was a little more active, with the impact of yesterday’s BoJ action still being felt there, as 30s and 40s sit over 7bp richer on the day, with 40s threatening to break below 1.00% in yield terms. Note that 10-Year JGB yields are little changed on the session, printing around the 0.225% mark, 2.5bp shy of the upper boundary of the BoJ’s permitted trading range. Futures were -1 at the lunch bell. 2-Year supply awaits this afternoon. Local headline flow has been light, with Chief Cabinet Secretary Matsuno re-affirming the already outlined government stance on JPY movements.