Futures Holding Weaker, Rinban Operations Today Covering 1-3Y & 5-25Y+ JGBs

JGB futures are holding weaker, slightly above Tokyo session lows, -35 versus settlement levels.

• Japan's current-account surplus was at Y1.86tn in May versus Y1.895tn in April. On a seasonally adjusted basis, exports fell slightly more than imports. The services sector also slipped back into a deficit of -¥464.5bn. Japan's foreign spending was +479% y/y in May, as outbound travel continued to recover, although foreign visitors to Japan were still 1.9mn in the month, compared with 147k in May last year. Also today, bank lending prints +3.2% y/y versus 3.4% prior. Bank lending ex-trusts prints +3.5% y/y versus 3.8% prior.
• Today the BoJ announced they will buy bonds with repurchase agreements for the first time since March 2022 after interbank borrowing costs climbed.
• The cash JGBs curve bear steepens with yields 0.1bp to 3.4bp higher. The benchmark 10-year yield is 3.4bp higher at 0.462%, still below the BoJ's YCC limit of 0.50%. The benchmark 5-year is 1.5bp cheaper at 0.116%, ahead of tomorrow’s supply.
• Today BoJ Rinban operations covering 1-3-year and 5-25+-Year JGBs are scheduled.
• Swap rates are higher across the curve with rates 0.4bp to 2.7bp higher. Swap spreads are mixed.