Long End Still Outperforming

JGB futures have nudged higher during Tokyo dealing to last deal at unchanged levels, unwinding overnight losses, while the early Tokyo dynamic of long end outperformance, 7-Year underperformance and a twist flattening of the curve remains intact. Spill over from a weaker JPY may have provided some incremental support for the space, with little in the way of fundamental drivers observed when it comes to FX trade. The previously outlined PBoC inaction (when it came to today’s MLF operations) and run-of-the-mill FX commentary from the Japanese policymaking sphere have done little to generate meaningful activity in the JGB space.