Futures Hold Firm While Long End Bid Reverses & More

The JGB curve has twist steepened today, with the early bid in the long end giving way, probably in light of the extent of the move witnessed since yesterday’s solid round of 30-Year JGB supply.

• That leaves the major benchmarks running 1bp richer to 3.5bp cheaper, with the curve pivoting around 20s.
• 7s outperform on the curve given the bid in futures (after a firm overnight session, alongside a rally in wider core global FI markets), which came back in during the Tokyo afternoon alongside an uptick in wider core FI markets, leaving the contract +25 into the bell.
• Local headline flow has been limited, with BoJ Governor Kuroda providing familiar rhetoric, while comments from some of the major sovereign rating agencies re: Japanese policy settings had no tangible impact on the space.
• PPI data and the latest liquidity enhancement auction for 5- to 15.5-Year JGBs headline the domestic docket on Friday.