Futures Move Lower, Swap Spreads Widen

JGB futures weakened further during morning dealing, going out at worst levels of the session (-24), as the overnight recovery in U.S. Tsy yields spilled over into Tokyo morning trade. Benchmark JGBs were little changed to 3.5bp cheaper across the curve, with the long end leading the way lower, while the 3- to 5-Year zone was little changed. Swap flows seemingly aided the cheapening dynamic, with spreads wider across most of the curve. Note that super-long swap rates sit ~5bp higher on the session.

• Domestic news flow has largely focused on sanctions that Japan is imposing on Russia in light of the recent developments in Ukraine. Elsewhere, recent headlines covering comments from Japanese PM Kishida flagged a desire to the working more closely with the BoJ, in effort to better manage the economy.
• 2-Year JGB supply is due this afternoon.