Local COVID Issues Remain

The cash JGB space trades flat to 1.0bp richer at typing, with futures last +7, just shy of best levels. The previously flagged Tokyo state of emergency questions and the broader (modest) risk aversion evident in early trade this week provided initial support for the space, which held even as the Nikkei 225 unwound its early losses. The lunch break saw the Governor of Osaka note that the region will request the implementation of a state of emergency, with Chief Cab. Sec. Kato noting that prompt consideration is required re: the Tokyo & Osaka state of emergency situations, although this round of headline flow failed to drive anything in the way of a notable market reaction.

• A quick look at the offer/cover ratios witnessed in today's BoJ Rinban operations (note that the 25+ Year operations represented the first round of re-sized operations in that bucket since the well-documented tweaks announced at the back end of March) revealed steady cover for 25+ Year ops and an uptick for the 3- to 5-Year ops.
• 20-Year JGB supply headlines the local docket on Tuesday.