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Futures Uptick At Lunch, BoJ Willing To Assist Earthquake Effort

JGBS

At the Tokyo lunch break on the first local session of the year, JGB futures are slightly stronger, +5 compared to settlement levels on Friday.

  • The session has been data-light, with Jibun Bank Japan PMI Mfg (F) as the sole release. Monetary Base, Jibun Bank PMI Composite & Services and Consumer Confidence data are due tomorrow.
  • BoJ Governor Ueda says that he hopes wages and inflation will rise in a balanced manner this year. The BOJ will be fully prepared to support the financial system after the earthquake in northwestern Japan earlier this week, Ueda says in a brief speech at a new year conference in Tokyo. (See Bloomberg link)
  • Cash US tsys are dealing little changed in today's Asia-Pac session as participants digest yesterday’s release of the December FOMC Minutes.
  • The cash JGB curve has bear-steepened beyond the 1-year (1.6bps cheaper), with yields 0.5bp to 2.6bps higher. The benchmark 10-year yield is 0.8bps higher at 0.622% versus the Nov-Dec rally low of 0.555%.
  • The swaps curve has slightly twist-steepened, with rates +/- 0.5%. Swap spreads are tighter across maturities.

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