Heavy Start For Futures On Post-Holiday Plays, Off Early Lows

JGB futures trade heavily as Tokyo plays catch up to the dynamics observed since Monday’s local close, leaving the contract -60 ticks or so, ~20 ticks off session lows printed just after the Tokyo open. 7s lead the weakness on the curve, given the move in futures, with the major benchmarks across the cash curve running little changed to ~7bp cheaper. The swap curve has seen a more linear round of steepening, with swap spreads wider across the curve, excluding 7s, which are flat to a touch tighter.

• Local headline flow has seen Finance Minister Suzuki point to the general risk averse moves witnessed in markets at different times in recent days, while identifying the need to coordinate with the BoJ and global counterparts to mitigate risks and welcoming the daily swap line agreements between the major global central banks. He also stressed the need to act on inflation, with reserve funds to be deployed flexibly re: that mater.