Heavy Start For JGBs Despite Modest Sense Of Caution, U.S. Observes Public Holiday

JGB futures dipped at the re-open after Jiji reported that the BoJ will consider a proposal to allow wider fluctuations around its 10-Year JGB yield target. The contract has moved away from worst levels since and last changes hands at 151.72, 13 ticks below settlement. Broader sense of caution has lent some support to JGB futures, with both e-minis & the Nikkei 225 operating in negative territory. Cash JGB yields hold above neutral levels. Final industrial output figures headlines the local docket today, while PM Suga will deliver a policy speech in parliament.

• JGB weakness has spilled over into T-Notes, dragging them off highs. They last trade +0-02 at 136-29+, with cash Tsy yields closed due to a market holiday in the U.S. Eurodollar futures trade unch. to +0.5 tick through the reds.
• In Australia, YM trades +0.5 & XM trades +1.5. Cash ACGB yields sit unch. to -6.6bp across a flattened curve. Bills trade unch. to -1 tick through the reds. The RBA offered to buy A$2.0bn of ACGBs with maturities between Nov '24 & May '28 (excluding Apr '25). Eyes are on China's GDP & economic activity data, due at the top of the hour.