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Futures Off Worst Levels, Little Reaction To BoJ Ops

JGBS

Trade in JGB futures has been two-way since the re-open, albeit contained.

  • The contract is a touch above late overnight levels ahead of the Tokyo bell, -16 vs. Tuesday’s settlement.
  • Cash JGBs are 0.5-2.0bp cheaper on the day, with the super-long end leading the way lower. Note that 10-Year JGBs are sitting at 0.25%, with the latest round of BoJ fixed rate operations failing to push 10-Year JGB yields away from the upper boundary of the Bank’s permitted trading range. Note that the BoJ has not came in with a second round of fixed rate ops/Rinban.
  • On the fiscal front there have been some apparent leaks re: the support package that will be announced in the coming weeks, with one pillar centring on cash handouts to low income Japanese families with children.
  • A liquidity enhancement auction for off-the-run 15.5- to 39-Year JGBs headlines the domestic docket on Thursday.
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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