Futures Stronger, Narrow Range, 5-Year Supply & BoJ Speak Tomorrow

JGB futures are holding richer at 148.64, +11 versus settlement levels, after trading in a narrow range in the Tokyo session.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined BoJ Minutes for the April Meeting and a speech from BoJ Board Member Seiji Adachi.
• According to the MNI technicals team, JGBs continue to operate above support at 147.34, the May 26 low. The contract pierced 148.41, the May 12 high, on Friday. A clear break would strengthen a bullish case and signal scope for a climb towards the next key resistance at 149.21/53, this year's highs from May and March. Clearance of these levels would highlight an important break. To the downside, a breach of 147.34 would signal a stronger reversal and open 146.11, the Feb 22 low.
• The cash JGBs curve twist flattens with the 10-year zone (-1.2bp lower) leading. The benchmark 10-year yield is at 0.381%, below the BoJ's YCC limit of 0.50%.
• Swap spreads are generally narrower out to the 20-year zone and wider beyond.
• The local calendar tomorrow sees Weekly Investment Flow data (June 16) ahead of 5-year supply. BoJ Board Member Noguchi is also scheduled to give a speech in Okinawa.