Futures Test Overnight Lows, Cash Mixed, Ueda Eyed

Local headline flow remained light, while JGB futures were defensive as Tokyo reacted to Friday’s moves in wider core global FI markets, leaving the contract -10 at the lunch break, with participants unwilling to force a break of the overnight session base in the contract thus far (that level represented the Tokyo morning low). Cash JGBs are more mixed, generally trading within -/+1bp of Friday’s closing levels, with 7s providing the weak point owing to the move seen in futures. The swaps curve has seen a more conventional, albeit limited, twist flattening move, pivoting around 30s. Focus remains on BoJ Governor-in-waiting Ueda’s afternoon appearance in front of the upper house of parliament, which provides the focal point for participants on Monday.