Generally Bid Across The Curve, Although BoJ YCC Boundary Breached

JGB futures continue to firm on the matters that we outlined earlier, also aided by U.S. Tsys ticking away from worst levels of the session, although 10-Year JGB yields show through the peak of the band permitted under the BoJ’s current YCC settings (even with most expecting no change in policy settings when the Bank convenes next week, along with BBG sources pointing to the likelihood of no policy tweaks). JGB yields are incrementally higher in (10s and 40s) to 2bp lower, with the belly still leading the general bid. Swap rates are flat to 2.5bp firmer as that curve sees some more traditional steepening, which could be a source of the pressure for 10-Year JGBs.