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JGBS: Cash Bonds Cheaper But Off Worst Levels

JGBS
GlobalBulletAPACFixed Income BulletsJapanRegionMarkets

JGB futures are weaker but off session lows, -18 compared to the settlement levels.

  • Outside of the previously outlined PPI, BSI Sentiment & Investment Flows, the market has had comments from BoJ Tamura to digest. His remarks came across as more hawkish than those made by Nakagawa yesterday.
  • (MNI, ICYMI) BoJ's Tamura emphasised the need to raise short-term interest rates to around 1% by the latter half of the long-term forecast period through fiscal 2026 to achieve the 2% inflation target. He views the neutral rate at 1% and suggests adjusting rates based on the certainty of reaching the price goal.
  • Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after yesterday’s post-CPI sell-off. The focus now turns to today's US PPI and Weekly Claims data.
  • Cash JGBs are flat to 2bps cheaper across benchmarks, with the 1-year leading. The benchmark 20-year yield is 0.8bp higher at 1.680% after today’s supply.
  • 20-year supply showed mixed demand metrics, with the low price failing to meet dealer expectations and the auction tail lengthening. However, the cover ratio was steady at 3.4749x versus 3.4223x previously.
  • Swap rates are 1-5bps higher, with the curve steeper.
  • Tomorrow, the local calendar will see Industrial Production and Capacity Utilisation data.
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JGB futures are weaker but off session lows, -18 compared to the settlement levels.

  • Outside of the previously outlined PPI, BSI Sentiment & Investment Flows, the market has had comments from BoJ Tamura to digest. His remarks came across as more hawkish than those made by Nakagawa yesterday.
  • (MNI, ICYMI) BoJ's Tamura emphasised the need to raise short-term interest rates to around 1% by the latter half of the long-term forecast period through fiscal 2026 to achieve the 2% inflation target. He views the neutral rate at 1% and suggests adjusting rates based on the certainty of reaching the price goal.
  • Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after yesterday’s post-CPI sell-off. The focus now turns to today's US PPI and Weekly Claims data.
  • Cash JGBs are flat to 2bps cheaper across benchmarks, with the 1-year leading. The benchmark 20-year yield is 0.8bp higher at 1.680% after today’s supply.
  • 20-year supply showed mixed demand metrics, with the low price failing to meet dealer expectations and the auction tail lengthening. However, the cover ratio was steady at 3.4749x versus 3.4223x previously.
  • Swap rates are 1-5bps higher, with the curve steeper.
  • Tomorrow, the local calendar will see Industrial Production and Capacity Utilisation data.