Futures Uptick After Extended Holiday

JGB futures opened stronger, +18 versus Tuesday’s settlement levels, with local participants playing catch-up with market conditions and monetary policy implications from the Fed and the ECB after the Golden Week holidays. The US tsy 10-year yield lifted 6bp to 3.44% in trading ahead of the weekend following solid employment data, but still remain well below the 3.56% prevailing around the Tokyo close on Tuesday.

• JBM3 currently sits at 148.63, sandwiched between the April trading range's top at 147.92 and the March 22 high at 149.53.
• Cash JGBs are mixed after the 3-day holiday with yields +0.6 higher to 0.9bp lower. The 1-year zone is the weakest zone with the 7-10 year, the strongest. The benchmark 10-year yield is at 0.412%, below the BoJ's YCC limit of 0.50%.
• The swaps curve has twist flattened with rates 0.1bp higher to 1.2bp lower. Swap spreads are generally tighter except for the 1-2 year and 7-10 year zones.
• The BoJ’s March 9-10 Meeting, Governor Kuroda’s last, showed that BoJ board members believed it was important to continue with easing for prices goals and won’t hesitate to add easing if necessary.
• Jibun Bank PMI Services (final) prints 55.4 versus 54.9 in March, the highest reading since the series began.
• Today will also see BoJ Rinban operations covering 1-5 Year and 10-25-Year JGBs.