Futures Holding Gains, Narrow Range, Few Domestic Drivers

In the Tokyo afternoon session, JGB futures sit mid-range at 148.76, +14 compared to the settlement levels.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined comments from Governor Ueda in parliament re: seeing various uncertain elements over prices and fiscal management at the time of an exit from monetary easing. (link ICYMI)
• Cash JGBs are trading mixed in the Tokyo afternoon session with yield movements ranging from +0.8bp (1-year) to -0.8bp (20-year). The benchmark 10-year yield is 0.1bp lower at 0.437%.
• The swap curve has twist steepened with a 10-year pivot. Swap spreads are mixed, generally narrower out to the 5-year zone but wider beyond.
• The local calendar next week sees PPI (May) and Machine Tool Orders (May P) on Monday, BSI Large Manufacturing (Q2) on Tuesday, Trade Balance (May) and Core Machine Orders (Apr) on Wednesday and Weekly Investment Flows (June 9) on Thursday. The calendar highlights undoubtedly will be the BoJ Policy Decision on Friday.