Futures Firm, Belly Outperforms

JGB futures have ticked higher since the Tokyo re-open, following the trajectory of wider core global fixed income markets during Asia-Pac hours, last dealing +10 after a brief and limited look above the overnight session high. Cash JGBs run ~1bp richer to ~1bp cheaper across the curve, with the belly outperforming as 7s benefit from the rally in futures, while 30s represent the weakest point on the curve as Tokyo react to Wednesday’s FOMC and the initial post-Fed twist steepening in U.S. Tsys. Swap spreads are generally a touch tighter. Domestic headline flow has been non-existent, outside of the previously flagged weekly international security flow data which seemingly saw an end of the recent streak of short covering in JGBs on the part of international investors.