Futures Coil Overnight, May Look To Bid In U.S. Tsys For Lead At Tokyo Open

JGB futures essentially flatlined overnight, given the mixed signals from cheaper German & UK bonds vs. richer Tsys, finishing -3. The extension of the Tsy richening through late NY/early Asia-Pac dealing may provide support to JGB futures at the Tokyo re-open.

• Late on Monday Nippon Life revealed that it plans to increase domestic bonds holdings, including super-long JGBs and FX-hedged foreign corporate debt, with FX-hedged foreign bond holdings expected to sit at unchanged levels during the current FY, while FX-unhedged international bond holdings are seen flat to a touch lower over the same period (with the well-documented, elevated FX-hedging costs at the fore there). The company noted that it expects the BoJ to widen the range of its 10-Year YCC mechanism around June, meaning the company will not rush to buy JGBs, indicating that it needs 30-Year yields of 1.5-2.0% to become active in that zone of the curve.
• A parliamentary appearance from BoJ Governor Ueda is slated for this morning (09:40 Tokyo/01:40 London), while domestic data releases are headlined by the monthly services PPI print.