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Long End Outperforms As Swaps Nudge Tighter

JGBS

Light underperformance in the belly of the cash curve provided some pressure for JGB futures, although that was at least partially unwound, with that contract last +2, after a brief look through the overnight highs early on in Tokyo. Outperformance crept into the super-long end during the afternoon session, with swaps generally tightening vs. JGBs across the curve.

  • Both of the buckets covered by the BoJ's 3-10 Year Rinban ops saw a widening of spreads and very modest upticks in cover ratios, although there wasn't any evidence of notable selling, with the 5-10 Year offer/cover holding comfortably below 2.00x.
  • Soft core machine orders triggered a downgrade in the Japanese government's view on the space.
  • 5-Year JGB supply headlines locally on Thursday.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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