Futures Holding Cheaper At Lunch, Bear Steepening Of JGB Curve, Rinban Results Due

At the Tokyo lunch break, JGB futures are holding in negative, -11 compared to the settlement levels, after gapping lower at the open following a Sunday article in the Nikkei newspaper that reported BOJ officials are pondering whether to tweak the settings of the yield-curve control program at the upcoming policy meeting. The article didn’t say where it obtained the information.

• US tsys are holding cheaper in Asia-Pac morning trade, with cash tsys 4-6bps cheaper across the major benchmarks. The curve has steepened. TYZ3 deals at 105-20+, -0-11+ compared to NY closing levels.
• The local calendar is empty today, apart from BOJ Rinban operations covering 1- to 25-year JGBs.
• The cash JGB curve has bear-steepened, with yields 0.2bp to 4.1bps higher. The benchmark 10-year yield is 0.8bps higher at 0.850%, above BOJ's YCC soft limit of 0.50% but below its hard limit of 1.0%. It is also lower than the fresh cycle high of 0.863% set earlier today.
• The swaps curve has also bear-steepened, with rates 0.5bp to 3.0bps higher. Swap spreads are narrower across maturities beyond the 3-year.