Futures Holding Weaker, 20Y Supply Due, Rengo Results Tomorrow

In Tokyo morning trade, JGB futures have extended overnight weakness to -29 compared to settlement levels.

• There was a noticeable pick-up in offshore purchases of Japanese bonds last week. Interestingly, last week's ¥1152.6bn net inflow was the strongest since the start of April last year. Japan's buying of offshore bonds picked up noticeably as well. This was the strongest weekly outflow since Dec last year.
• The focus remains on next week's BoJ meeting.
• The Rengo announcement will be in focus tomorrow around its first tally of wage agreements. Its members, which make up the largest union federation in Japan, have asked for a 5.85% rise.
• Rengo will release the results of the first survey around 1400 JST (0500 GMT). Bank officials in charge of monetary policy stand ready to analyse the results after the release ahead of the policy meeting next week. (MNI)
• Cash JGBs are cheaper with yields flat to 2bps higher. The benchmark 10-year yield is 1.5bps higher at 0.782% versus the yearly high of 0.779%, set earlier in the week.
• The 20-year yield is 1.9bps higher, underperforming on the curve, ahead of today’s supply.
• The swaps curve has slightly bear-steepened, with rates flat to 1bp higher.