Futures Fade Alongside Wider Core Global FI, Downtick In Super-Long Rinban

JGB futures have faded from best levels, with cross-market moves in the driving seat given a lack of meaningful domestic headlines. Early Tokyo trade saw futures have an incremental look through their post-Tokyo peak, before softening alongside the likes of U.S. Tsy futures and ACGBs, last printing -1. Cash JGBs are 1.5bp richer to 1bp cheaper across the curve, with the 7- to 20-Year zone leading the bid (excluding 10s, which are little changed, hovering just below the upper boundary of the BoJ’s YCC parameters), while 30+-Year paper is cheaper. There has been a relatively parallel ~1bp shift lower in benchmark swap rates, leaving swap spreads mixed across the curve.

• Today’s Rinban operations were largely as expected, outside of a Y50bn downtick in the purchase size of 25+-Year paper (vs. previous operations in that bucket), which is the likely source of more notable pressure on the super-long end.
• Recent headlines covering data from the Japanese MoF revealed that foreign investors sold a record amount of JGBs in January (Y4.119tn), while domestic insurers sold a record amount of super-long JGBs in the month (Y446.2bn).