Futures Off Lows, BoJ Continues Repo Ops

A light bid in U.S. Tsys (which has faded) and weakness in the Nikkei 225 supported JGB futures after the early sell off. This means that the early Tokyo low continues to represent the session extreme, with the contract hitting the lunch bell -16.

• Cash 10-Year JGB yields have moved above 0.10%, printing at the highest level since early November in the process (0.121% provides the next point of technical resistance on that front). The major cash JGB benchmarks are flat to 1bp cheaper at typing, with the 7- to 10-Year zone leading the weakness.
• The BoJ continues to administer JGB repo operations as it looks to manage cash and collateral levels in the system.
• Note that U.S. Tsys have cheapened a little during the Tokyo lunchbreak, which may apply modest pressure to JGBs at the re-open.
• The latest round of BoJ Rinban operations drew the following offer/cover ratios:
• 1- to 3-Year: 2.41x (prev. 3.01x)
• 3- to 5-Year: 3.28x (prev. 2.10x)
• 10- to 25-Year: 3.19x (prev. 3.277x)