Futures Weaken After BoJ Summary Of Opinions’ Release

In Tokyo morning trade, JGB futures have gapped lower from overnight closing levels, -7 compared to settlement levels, after the release of the BoJ Summary of Opinions for the March MPM.

• (Bloomberg) -- One Bank of Japan board member pointed out that the end of the bank’s negative interest rate wouldn’t constitute a policy shift toward tightening, according to a summary of opinions from the March monetary policy meeting, where the bank raised interest rates for the first time since 2007. (See link)
• Offshore investors dumped local bonds, with nearly -¥3900bn in outflows. Last week marked the departure from NIPR for the BoJ. This was the largest weekly outflow since early 2023. In terms of Japan outbound flows, we saw a decent pick-up in offshore bond flows.
• Cash JGBs are dealing mixed, with yield movements bounded by +1.7bps (1-year) and -1.2bps (40-year). The benchmark 10-year yield is 0.3bp lower at 0.772% versus the YTD high of 0.801%.
• The BoJ will conduct Rinban operations covering 3- to 25-year JGBs today.
• The swaps curve has twist-steepened for a second straight day, with rates 1bp lower to 3bps higher. Swap spreads are tighter out to the 7-year and wider beyond.