Futures Continue To Pare Gains

JGB futures have nudged lower during the Tokyo afternoon, building on the move away from overnight session highs, with a particularly poorly received round of 20-Year JGB supply aiding that dynamic. The contract is still +49 ticks on the day, just off Tokyo lows, over 100 ticks shy of post-Tokyo bests. There hasn’t been much in the way of meaningful domestic headline flow, with focus on the latest North Korean missile launch and Japan-South Korea relations. That has left the broader macro impetus and the aforementioned JGB auction at the fore. Cash JGBs run 2-9bp richer, with 7s still outperforming given the gains in futures since yesterday’s close, while 10-Year JGB yields still hover around 0.31%. Swap spreads are unchanged to wider, excluding 10s, where they are tighter.