Futures Marginally Firmer, Curve Flattens

JGB futures firm at the margins in early Tokyo trade, last showing +12 vs. settlement (some way shy of overnight highs), with the Nikkei 225 and U.S. e-mini futures on the defensive, alongside an uptick in U.S. Tsys and the JPY. Cash JGBs are 1-3bp richer as the curve flattens, catching up to Wednesday’s broader impulse in core global FI markets. The swap curve has also seen some flattening, although moves in those rates are generally more limited, leaving swap spreads flat to wider on the day.

• As we noted earlier, the weekly international security flow data from the Japanese MoF revealed that international investors were net buyers of Japanese bonds for the second time in 3 weeks, although the record net purchases seen 3 weeks ago continue to dominate when it comes to the assessment of recent dynamics in that metric (as a reminder, the record purchases observed in that week likely represented notable short cover surrounding the most recent BoJ decision and the banking sector tumult).
• 30-Year JGB supply provides the domestic risk event of note today.