Futures Pare Overnight Losses, 10Y Yields Hits Post-YCC Tweak High

JGB futures slightly pare overnight losses, -7 compared to settlement levels, in early Tokyo trade.

• A thin local docket on Monday leaves participants on headlines and US tsys watch.
• US tsys have opened dealing ~2bps cheaper across the major benchmarks. Local participants are perhaps looking ahead to Fed Chair Powell's speech at the Jackson Hole Symposium on Friday, a Bloomberg Market Pulse Survey noted that 80% of those surveyed said the speech will reinforce the message of a hawkish hold.
• Overnight, the US 10-year nominal and real yields rose to 4.35% and 2.0% respectively, marking their highest points since 2007 and 2009.
• The cash JGB curve twist steepens, pivoting at the 2s, with yields 0.4bp to 4.2bp higher (20-year). The benchmark 10-year yield is 2.5bp higher at 0.66%, a post-YCC tweak high.
• Today the MoF will conduct a Liquidity Enhancement Auction for OTR 5-15.5-Year JGBs.
• The swaps curve has bear steepened, with rates 0.1bp to 1.4bp higher. Swap spreads are narrower.