Lacking Real Momentum

JGB futures continued to struggle for any meaningful traction above 152.00, with the contract just above that level, +2 at typing. Cash trade sees outperformance in the front end, with light twist steepening in play.

• The BoJ left the size of its 1-10 Year Rinban operations unchanged, with the breakdown of each bucket as follows: 1-3 Year: Offer cover 3.77x (prev. 1.65x), Yield Spread -0.002 (prev. -0.010), Average Spread 0.000 (prev. -0.001). 3-5 Year: Offer cover 2.73x (prev. 2.63x), Yield Spread -0.006 (prev. -0.005), Average Spread -0.004 (prev. -0.004) 5-10 Year: Offer cover 2.21x (prev. 2.63x), Yield Spread -0.004 (prev. -0.007), Average Spread -0.001 (prev. -0.005). The normalisation of the 1-3 Year cover didn't provide any notable headwinds for 2s.
• Eyes now on the formation of incoming Japanese PM Suga's cabinet, although there is little/no expectation for anything in the way of meaningful adjustments given recent press reports and Suga's stance as a continuation candidate.
• The latest BoJ monetary policy decision headlines locally tomorrow, with no expectations for meaningful policy moves from the Bank.