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JGBS: Slightly Richer, Focus On Extra Budget, Heavy Local Calendar Tomorrow

JGBS
BulletAPACFixed Income BulletsJapanMarkets

JGB futures are holding richer, +22 compared to settlement levels, ahead of tomorrow’s heavy data drop.

  • “Japan will lean heavily on extra tax revenue in a ¥13.9 trillion additional budget to finance Prime Minister Shigeru Ishiba’s stimulus package, according to NHK.” (per BBG)
  • “Japan is to issue more than 6trn Yen in JGBs to fund extra budget, sources say.” (per RTRS)
  • Cash US tsys are closed today ahead of the Thanksgiving holiday.
  • Cash JGBs are slightly mixed across benchmarks, with yields 2bps lower to 1bp higher. The benchmark 10-year yield is 1.2bps lower at 1.059% versus the cycle high of 1.108%.
  • The swaps curve has twist-steepened, with rates 1bp lower to 4bps higher.
  • OIS pricing has firmed across meetings following the BOJ's widely anticipated decision to hold rates steady at its October meeting. Since the decision, pricing has risen by 4–19bps, with September 2025 leading the gains.
  • Market expectations currently indicate: a 51% probability of a 25bp hike in December; a cumulative 73% chance by January; and a full 25bp increase is not fully priced in until May 2025.
  • Tomorrow, the local calendar will see Tokyo CPI, Jobless Rate, Job-To-Applicant Ratio, Retail Sales, Housing Starts and Industrial Production data alongside 2-year supply.
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JGB futures are holding richer, +22 compared to settlement levels, ahead of tomorrow’s heavy data drop.

  • “Japan will lean heavily on extra tax revenue in a ¥13.9 trillion additional budget to finance Prime Minister Shigeru Ishiba’s stimulus package, according to NHK.” (per BBG)
  • “Japan is to issue more than 6trn Yen in JGBs to fund extra budget, sources say.” (per RTRS)
  • Cash US tsys are closed today ahead of the Thanksgiving holiday.
  • Cash JGBs are slightly mixed across benchmarks, with yields 2bps lower to 1bp higher. The benchmark 10-year yield is 1.2bps lower at 1.059% versus the cycle high of 1.108%.
  • The swaps curve has twist-steepened, with rates 1bp lower to 4bps higher.
  • OIS pricing has firmed across meetings following the BOJ's widely anticipated decision to hold rates steady at its October meeting. Since the decision, pricing has risen by 4–19bps, with September 2025 leading the gains.
  • Market expectations currently indicate: a 51% probability of a 25bp hike in December; a cumulative 73% chance by January; and a full 25bp increase is not fully priced in until May 2025.
  • Tomorrow, the local calendar will see Tokyo CPI, Jobless Rate, Job-To-Applicant Ratio, Retail Sales, Housing Starts and Industrial Production data alongside 2-year supply.