Futures Holding Below Settlement Levels

A relatively lacklustre morning saw JGB futures edge away from their overnight low, hitting the lunch break -9 ticks, while cash JGB trade saw the major benchmarks print little changed to 1bp cheaper on the day (7s & 40s provided the weak points there), catching up to the overnight move in futures/U.S. Tsys. There hasn’t been much in the way of meaningful news flow to update on from a local perspective, with a lack of spill over from the move higher in domestic equities noted. The latest round of BoJ Rinban operations (covering 1- to 10-Year JGBs) drew offer/cover ratios of 2.7-3.0x times. Such results are unlikely to provide much trading impetus during the Tokyo afternoon.