Futures Holding Cheaper & Around Overnight Closing Levels, Climate Bond Supply Due

In Tokyo morning trade, JGB futures are holding sharply cheaper, -43 compared to settlement levels, but slightly above the session low of 145.75 (-56). With the domestic calendar empty, apart from 10-year climate transition bond supply, local participants have been content to maintain the negative lead-in from US tsys overnight.

• (Bloomberg) -- The world’s first sovereign transition bonds on sale Wednesday in Japan look set to see strong demand due to their novelty despite scepticism among investors abroad about the debt’s environmental credentials. (See link ICYMI)
• (Bloomberg) -- Governor Kazuo Ueda is in a rare sweet spot for Japanese monetary officials as he weighs a historic policy move with virtually no political opposition, in sharp contrast to the experiences of his Bank of Japan predecessors. (See link)
• The cash JGB curve has bear-steepened, with yields 1-5bps higher. The benchmark 10-year yield is 3.5bps higher at 0.763% versus the February low of 0.665% and the Nov-Dec rally low of 0.555%.
• Swaps are mostly cheaper, with rates 0.5bp lower (20-30-year) to 3bps higher (40-year). Swap spreads are tighter.