Futures Pare Losses In The Afternoon Session, Jobless Rate and 2Y Supply Tomorrow

JGB futures have unwound much of the morning weakness, -2 compared to settlement levels, in the Tokyo afternoon session.

• There hasn’t been much in the way of domestic drivers to flag. June Leading and Coincident Indices, just released, printed respectively little changed at 108.9 and 115.1.
• Accordingly, local participants have spent the Tokyo session on headlines and US tsys watch. US tsys sit ~1bp richer across the major benchmarks in Asia-Pac trading.
• Cash JGBs are dealing mixed, with yields +/-0.4bp. The benchmark 10-year yield is 0.4bp higher at 0.665%.
• Bloomberg reports that Japan’s sovereign debt rating needn’t automatically change if the central bank lifts its negative interest rate policy, according to Fitch Ratings director Krisjanis Krustins. Nominal interest rates are only one factor for determining the trajectory of government debt, Krustins, who covers Asia-Pacific sovereigns for the firm, said in an interview on Aug. 25. (See link ICYMI)
• Swap rates are mixed, with pricing 0.4bp lower to 0.5bp higher. Swap spreads are mixed.
• Tomorrow the local calendar sees the Jobless Rate and the Job-To-Applicant Ratio for July, along with 2-year supply.