Free Trial

Hovering Around Unchanged Into The Weekend

JGBS

The JGB space hasn’t really managed to generate anything in the way of a meaningful move away from early Tokyo levels, with futures -2 as we move towards the close, while cash JGBs operate within 1bp of yesterday’s closing levels.

  • An uptick in swap rates, resulting in swap spread widening and swap curve steepening, will have applied some light pressure to JGBs.
  • Headline flow from Finance Minister Suzuki & BoJ Governor Ueda didn’t move the needle, failing to introduce fresh, tangible information.
  • BoJ Rinban operations (covering 1- to 10- & 25+-Year JGBs) also did little for JGBs.
  • In the corporate bond space, Berkshire Hathaway priced ~Y165bn of bonds in a 5-part deal, after Warren Buffett pointed to increased investment in Japanese trading houses in recent days.
  • Market chatter has turned towards the investment intention outlines for the domestic life insurer and pension fund community, with the potential for a meaningful BoJ policy pivot, in addition to the volatility observed in wider financial markets alongside the well-documented, elevated FX-hedging costs that Japanese investors currently face, generating even deeper than normal interest in the capital deployment plans of this sizable investor cohort (the semi-annual outlines will likely filter out over the next couple of weeks or so).
  • Looking ahead to next week, national CPI data and 20-Year JGB supply provide the highlights of the local docket.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.