Futures Weaker, US Tsys Weaker After Upside Surprise in Payrolls

In post-Tokyo trade ahead of the weekend, JGB futures were weaker, closing -9 compared to settlement levels, after US tsys cheapen sharply. Tsy futures finished near late session lows after mixed employment data: strong May jobs gains and up-revisions for the prior two data sets, versus a higher unemployment level.

• TYU3 broke support on its way to a session low of 113-25 (-30.5). The next key support level and the bear trigger is 112-29+, the May 26 / 30 low, according to MNI’s technical team.
• Cash tsys 2-year and 10-year yields finished 16bp and 10bp higher respectively.
• The oil price spike post the weekend's news of Saudi cuts is likely to weigh at the margin (Brent is +3% to $78.40/bbl in early dealings today), given Japan's net energy importer status.
• Bloomberg writes that the scourge of negative-yielding debt refuses to go away for investors as the Bank of Japan’s continued reluctance to roll back quantitative easing has pushed some local yields back below zero. Japanese bonds make up all of the global negative-yield index. (link)
• On the data front today, we have the final Jibun Bank PMI readings for the services and composite indices.