Futures Holding Gains, Light Calendar, 10Y Yield Below 0.60%

JGB futures are holding early session gains in the Tokyo afternoon session, + 31 compared to settlement levels.

• The local docket has been light today, with M2 & M3 money stocks as the only releases so far. Machine Tool Orders are due later.
• Accordingly, the gains through the Tokyo morning session appear linked to a richening in US tsys in Asia-Pac trade, although they are now off bests. US tsys are dealing flat to 2bp richer with the curve flatter.
• Cash JGBs have bull flattened with 0.6bp to 4.1bp lower beyond the 1-year zone. The benchmark 10-year yield is 2.1bp lower at 0.589%, above BoJ's YCC old limit of 0.50% but below its new hard limit of 1.0%.
• The Japan 10-year real yields fell 1.1bp to -0.53% on Wednesday from the previous business day, according to Bloomberg. Real yields have risen 11bp this month. (See link)
• Swap rates are lower across the curve. Swap spreads are wider across the curve.
• Tomorrow the local calendar sees International Investment Flow, PPI and Tokyo Office Vacancies data.
• The US docket is thin later today with just MBA Mortgage Applications due.