Futures Sitting Mid-Range, Push Off Overnight High

JGB futures are currently sitting in the middle of their range, -2 compared to settlement levels. This afternoon, JGB futures experienced some cheapening, likely due to the reversal of early Asia-Pacific strength in US Tsys.

• The JBM3 is currently trading at 148.02, which is higher than the range of 147.40-147.92 that it has been trading in since early April. Attention remains on 149.53, the March 22 high, according to MNI’s technical analyst.
• With few domestic drivers today, the local market has traded in a tight range ahead of the BoJ Decision tomorrow. The consensus view is that there will be no major policy changes due to Governor Ueda's recent appointment, existing BoJ forward guidance, the BoJ's view on inflation, and concerns about the US banking sector. There may be a small change to forward guidance by removing the reference to COVID-19.
• Cash JGBs twist steepen pivoting at the 7-year zone with yields -0.7bp lower to 0.5bp higher. The benchmark 10-year yield is flat at 0.465%, below the BoJ's YCC limit of 0.50%.
• Swap spreads are wider across the curve with the swaps curve bear steepening.
• The local data calendar sees the release of Tokyo CPI, Retail Sales and Industrial Production tomorrow, ahead of the BoJ Policy Decision.