Futures Holding Near Session Lows At Lunch, 5Y Supply Results Due

At the Tokyo lunch break, JGB futures are holding near session, -12 compared to the settlement levels.

• There hasn’t been much in the way of domestic drivers to flag with the economic data calendar empty.
• Japanese Finance Minister Shunichi Suzuki says that he expects the Bank of Japan to conduct appropriate monetary policy toward its sustainable price target, while in close cooperation with the government. (See link)
• Cash JGBs are cheaper across the curve, extending yesterday’s weakness. Yields are 0.4bp to 1.9bp higher, with the 1-2-year zone underperforming.
• The 5-year JGB is outperforming on the curve, 0.4bp higher at 0.290%, ahead of today’s supply. The yield on the 5-year benchmark JGB climbed to the highest level since January on Monday while the 10-year equivalent rose above 0.7% for the first time in more than nine years. The benchmark 10-year yield is 1.0bp higher again today at 0.719%%, a new post-YCC tweak high.
• Swap rates are 0.5bp to 1.8bp higher across the curve, with the belly underperforming. Swap spreads are wider beyond the 2-year.