Light Steepening Pressure, Prefecture Cancels Plans To Issue Long Bond

The major cash JGB benchmarks are mostly little changed on the day, with a slightly more pronounced round of cheapening observed in 20s, resulting in some light steepening of the curve. This came after some pressure for wider core global FI markets on Monday & during Tuesday’s Asia-Pac session. Futures have softened during the afternoon, but remain relatively contained, -10 ahead of the bell.

• BoJ Rinban operations covering 1- to 25-Year JGBs didn’t provide any tangible market impact.
• Fiscal speculation continued in Japan, with source reports doing the rounds re: adjustments to tax structures, alongside continued reports surrounding bond issuance to finance the government’s latest fiscal support package, although these headlines were not market moving.
• Participants also looked through the summary of opinions covering the latest BoJ monetary policy meeting.
• Shizuoka prefecture cancelled its plans to sell 20-Year paper owing to market conditions & the rise in super-long yields This comes after the prefecture cancelled plans to sell 30-Year paper back in September.
• Wednesday’s domestic docket consists of the release of the release of the latest economy watchers survey, BoP data and 30-Year JGB supply.