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Futures Dip Into Negative Territory, Sumitomo To Buy 30Y JGBs & FX-Hedged FR Assets

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In the early rounds of the Tokyo afternoon session, JGB futures are slightly weaker, -4 compared to the settlement levels, after today’s BoJ Rinban operations showed mixed results.

  • The 3-10-year bucket saw negative spreads but higher offer cover ratios. On the other hand, the 10-25-year+ bucket printed slightly positive spreads but lower cover ratios. At the margin, results are consistent with the slight cheapening in futures in early afternoon trading.
  • There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Services PPI data.
  • (MNI) Japan's Sumitomo Life Insurance company plans to buy several hundreds of billion yen 30-year Japanese government bonds and hedged foreign-denominated currency floating interest rate assets this fiscal year, the company’s chief fund manager said on Wednesday. (See link)
  • Cash JGBs are dealing mixed, with yield movements bounded by –0.8bp (5-year) and +2bps (40-year). The benchmark 10-year yield is unchanged at 0.889%, just shy of the YTD high of 0.894%.
  • The swaps curve has twist-steepened, pivoting at the 20s, with rates -2bp to +3bp. Swap spreads are tighter out to the 10-year and wider beyond.
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In the early rounds of the Tokyo afternoon session, JGB futures are slightly weaker, -4 compared to the settlement levels, after today’s BoJ Rinban operations showed mixed results.

  • The 3-10-year bucket saw negative spreads but higher offer cover ratios. On the other hand, the 10-25-year+ bucket printed slightly positive spreads but lower cover ratios. At the margin, results are consistent with the slight cheapening in futures in early afternoon trading.
  • There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Services PPI data.
  • (MNI) Japan's Sumitomo Life Insurance company plans to buy several hundreds of billion yen 30-year Japanese government bonds and hedged foreign-denominated currency floating interest rate assets this fiscal year, the company’s chief fund manager said on Wednesday. (See link)
  • Cash JGBs are dealing mixed, with yield movements bounded by –0.8bp (5-year) and +2bps (40-year). The benchmark 10-year yield is unchanged at 0.889%, just shy of the YTD high of 0.894%.
  • The swaps curve has twist-steepened, pivoting at the 20s, with rates -2bp to +3bp. Swap spreads are tighter out to the 10-year and wider beyond.