Futures Unwind Early Losses

JGB futures firmed a little after our previous update, which allowed the contract to hit the Tokyo lunch bell +5, unwinding almost all of its early Tokyo weakness. This allowed cash 7s to outperform, with the major JGB benchmarks running 1bp richer to 0.5bp cheaper across the curve. There isn’t really much to add to earlier commentary outside of that, with a lack of outright concession in 20s ahead of this afternoon’s auction noted and the BoJ’s continued presence in the market as it enforces its YCC conditions limiting any sell offs in paper out to 10s at present.

• In terms of flows, note that BBG headlines covering the monthly JSDA data pointed to foreign funds selling the largest monthly amount of 10-Year JGBs on record in April, while major domestic banks bought the largest amount of 10-Year JGBs since ’14 during the month, once again, per BBG headlines.