Futures Extend Overnight Weakness Seen On Friday

In Tokyo morning trade, JGB futures have extended overnight weakness seen ahead of the weekend, -11 compared to settlement levels.

• (Dow Jones) Sentiment among large Japanese manufacturers worsened for the first time in four quarters during the three months to March, reflecting a sharp deterioration in mood among automakers. The main index for sentiment among large manufacturers was +11, compared with +13 in December, according to the Bank of Japan's quarterly Tankan corporate survey released Monday. That compares with economists' forecast for +10. (See link)
• (Bloomberg) Japan’s large enterprises see inflation at 2.2% for output prices in the next year, according to the latest Tankan report.
• The cash JGB curve has bear-steepened, with yields flat (2-3-year) to 2.5bps higher (20-year). The benchmark 10-year yield is 1.3bps higher at 0.740% versus the YTD high of 0.801%.
• The swaps curve has also bear-steepened, with rates flat to 1.6bps higher. Swap spreads are mixed but wider beyond the 4-year.