Little Steeper Ahead Of BoJ

Cash JGBs run little changed to 1.5bp cheaper across the curve, with a very modest steepening bias apparent in limited dealing (20s provide the weakest point on the curve). Note that swap spreads are a touch narrower across the curve, with most of the major swap rates running marginally lower on the session.

• JGB futures ticked way from overnight lows, as wider global core FI markets nudged away from worst levels of the session, last +10..
• There has been little to note when it comes to local news flow.
• The latest liquidity enhancement auction covering off-the-run 1- to 5-Year JGBs saw firmer spread results than the previous offering, with the spread tail width remaining constant. However, the cover ratio eased below the 4.00x mark, suggesting that there was little in the way of widespread appetite at today’s auction
• Tomorrow’s domestic docket is headlined by the latest BoJ monetary policy decision. The Bank is set to leave its monetary policy settings as they are, with expectations for a markdown in immediate growth expectations and a mark higher for immediate inflation projections.