Futures Holding In Negative Territory After The Domestic Data Drop

In the Tokyo morning session, JGB futures are holding in negative territory, -9 compared to settlement levels, after the local data drop.

• Japan's exports fell in July for the first time in 29 months. Exports fell 0.3% (versus -0.2%) from a year earlier as shipments of items such as mineral fuels and semiconductor manufacturing equipment declined. Imports fell 13.5% y/y versus expectations of -15.2%.
• Core machine orders rose a lower than expected +2.7% m/m in June (+3.5% est.).
• Offshore investors continued to sell local debt, with a further -¥871.1bn in outflows. This was down on the prior week, in terms of the pace of outflows, but still marked the fifth straight week of outflows. In terms of Japan's outbound flows. Offshore purchases of bonds were negative last week.
• The cash JGB curve has twist flattened, pivoting at the 20s, with yields 0.7bp higher to 1.5bp lower. The benchmark 10-year yield is 0.4bp higher at 0.634%, above BoJ's YCC old limit of 0.50% but below its new hard limit of 1.0%.
• The 20-year JGB is outperforming on the curve, showing no concession, ahead of today’s 20-year supply.
• The swaps curve has also twist flattened, also pivoting at the 20s. Swap spreads are generally wider across the curve.