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Futures Off Lows, Curve A Touch Steeper

JGBS

The stabilisation and subsequent early Asia uptick in U.S. Tsys has seemingly supported JGB futures in early Tokyo trade, with the contract recovering a touch from overnight levels, last -5, reclaiming the 150.00 handle. The cash JGB curve has bear steepened with yields out to 10s essentially flat to marginally cheaper, while super-long paper has cheapened by a little over 1bp.

  • The latest round of policy-related rhetoric from BoJ Governor Kuroda was consistent with previous comments, as he noted that it is appropriate for the BoJ to continue with easing, with exit talk not appropriate until the Bank is near its CPI goals. Kuroda also stressed that the Bank’s fixed rate operations (as conducted on Monday) are a very powerful tool, with yesterday’s operation proving to be “effective.” On the JPY, Kuroda noted that the recent run of currency weakness hasn’t provided much of a tailwind when it comes to import costs. He also flagged the risk that “too low” super-long JGB yields pose to pension funds.
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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