Futures Lower, But 10yr JGB Yield Unable To Break Above Late April Highs

JGB futures were heavy at the open but couldn't break sub 144.00. Lows were at 144.04, but we have recovered some ground since then, last 144.26, -.30.

• Early downside impetus reflected a softer US Tsy tone, coupled with some hawkish headlines from the BoJ Summary Of Opinions (April policy meeting). Risks that the rate hike path may be firmer than expected (as one member noted), could see focus of a follow up tightening in June rise.
• BoJ Governor Ueda was also before parliament today and noted the impact of the weaker yen will be monitored from a policy standpoint. Wages data was mixed but still showed a resilient trend on a same sample basis.
• On the supply front we had the 6 month bill sales. The bid to cover was 3.24, versus 4.20 prior. Tomorrow's 30yr bond auction will come under greater focus though.
• In terms of cash JGB yields, we are firmer across the curve, led by the belly. 5-7yr tenors are up a little 3bps. The 10yr is at 0.91%, up 3bps, but is still sub late April highs above 0.93%.