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JGBS: Belly Leads Cash Bond Yields Lower, BoJ Nakagawa Speech Due

JGBS
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In Tokyo morning trade, JGB futures are stronger, +30 compared to settlement levels.

  • (Bloomberg) “As the Bank of Japan slows debt purchases, local investors are doing just the opposite, limiting upward pressure on bond yields. Private investors in the Asian nation bought a net ¥32.2 trillion ($225 billion) of Japanese government notes in the 12 months though August, Bloomberg analysis of BOJ data showed. Net purchases by the central bank have fallen below zero as redemptions surpassed buying.” (See link)
  • Today, the local calendar will see a speech from BoJ Board Member Nakagawa in Akita alongside BoJ Rinban Operations covering 1-10-year and 25-year+ JGBs.
  • Cash US tsys are ~1bp richer in today’s Asia-Pac session after yesterday’s bull-steepener. The US presidential debate is due to start around lunchtime local time.
  • After that, the US market will focus on tomorrow’s CPI and Thursday’s PPI inflation measures. Core non-housing service inflation is expected to see at least a repeat of the 0.21% M/M from July, with six analysts between 0.20-0.35% M/M.
  • Cash JGBs are richer across benchmarks, with the belly leading. Yields are 1bp higher (1-year to 3bps lower (10-year).
  • The swaps curve has bull-flattened, with rates flat to 3bps lower. Swap spreads are wider out to the 30-year.
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In Tokyo morning trade, JGB futures are stronger, +30 compared to settlement levels.

  • (Bloomberg) “As the Bank of Japan slows debt purchases, local investors are doing just the opposite, limiting upward pressure on bond yields. Private investors in the Asian nation bought a net ¥32.2 trillion ($225 billion) of Japanese government notes in the 12 months though August, Bloomberg analysis of BOJ data showed. Net purchases by the central bank have fallen below zero as redemptions surpassed buying.” (See link)
  • Today, the local calendar will see a speech from BoJ Board Member Nakagawa in Akita alongside BoJ Rinban Operations covering 1-10-year and 25-year+ JGBs.
  • Cash US tsys are ~1bp richer in today’s Asia-Pac session after yesterday’s bull-steepener. The US presidential debate is due to start around lunchtime local time.
  • After that, the US market will focus on tomorrow’s CPI and Thursday’s PPI inflation measures. Core non-housing service inflation is expected to see at least a repeat of the 0.21% M/M from July, with six analysts between 0.20-0.35% M/M.
  • Cash JGBs are richer across benchmarks, with the belly leading. Yields are 1bp higher (1-year to 3bps lower (10-year).
  • The swaps curve has bull-flattened, with rates flat to 3bps lower. Swap spreads are wider out to the 30-year.