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Futures Lower Early On

JGBS

JGB futures show through their overnight low in early Tokyo trade to last deal -28.

  • Fresh speculation re: BoJ YCC adjustment stemming from wider weakness in core global FI markets is a likely pre-requisite for a test of the September base (147.62), with that level well above the cycle low that was observed during the mid-June test of the BoJ’s will (145.05).
  • Cash JGBs are little changed to ~1.5bp cheaper across the curve, with 7s leading the weakness on the back of the move in futures.
  • Comments from Finance Minister Suzuki haven’t moved the needle, as he confirmed that the largest ever monthly fall in Japanese FX reserves took place in September (after data revealed the move), highlighting the well-documented FX intervention as a factor in play, but offering no further details on the matter.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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