Free Trial

Futures Positive, 10Y Weent Well, BoJ Rinban Operations Tomorrow

JGBS

JGB futures are stronger, +6 compared to settlement levels, but off post-auction highs. JBM4 gapped higher to a Tokyo session high of 145.69 (+14) in early afternoon dealings after 10-year supply showed strong demand metrics. The low price beat wider expectations, the tail shortened, and the cover ratio rose to 3.799x from 3.239x at March’s auction.

  • Crucially, this offering marked the inaugural auction for the new fiscal year and represented the first unveiling of the 10-year supply since the BoJ removed its negative interest rate policy (NIRP).
  • Against this backdrop, today's outcome established an optimistic tone for a market that has experienced mounting pressure since mid-December, fueled by expectations of policy tightening from the BoJ.
  • There hasn’t been much in the way of domestic data drivers to flag, outside of the previously outlined Monetary Base.
  • Cash US tsys are dealing flat to 1bp richer in today’s Asia-Pac session, with a steepening bias.
  • Cash JGBs are flat to 2bps cheaper across benchmarks. The benchmark 10-year yield is unchanged at 0.739% but slightly richer than pre-auction levels.
  • The swaps curve has bear-steepened, with rates flat to 1.6bps higher. Swap spreads are mixed.
  • Tomorrow, the local calendar sees Jibun Bank Composite & Services PMIs alongside BoJ Rinban Operations covering 1-5-year and 10-25-year JGBs.
208 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

JGB futures are stronger, +6 compared to settlement levels, but off post-auction highs. JBM4 gapped higher to a Tokyo session high of 145.69 (+14) in early afternoon dealings after 10-year supply showed strong demand metrics. The low price beat wider expectations, the tail shortened, and the cover ratio rose to 3.799x from 3.239x at March’s auction.

  • Crucially, this offering marked the inaugural auction for the new fiscal year and represented the first unveiling of the 10-year supply since the BoJ removed its negative interest rate policy (NIRP).
  • Against this backdrop, today's outcome established an optimistic tone for a market that has experienced mounting pressure since mid-December, fueled by expectations of policy tightening from the BoJ.
  • There hasn’t been much in the way of domestic data drivers to flag, outside of the previously outlined Monetary Base.
  • Cash US tsys are dealing flat to 1bp richer in today’s Asia-Pac session, with a steepening bias.
  • Cash JGBs are flat to 2bps cheaper across benchmarks. The benchmark 10-year yield is unchanged at 0.739% but slightly richer than pre-auction levels.
  • The swaps curve has bear-steepened, with rates flat to 1.6bps higher. Swap spreads are mixed.
  • Tomorrow, the local calendar sees Jibun Bank Composite & Services PMIs alongside BoJ Rinban Operations covering 1-5-year and 10-25-year JGBs.