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Mundane Session, Light Richening Seen

JGBS

Cash JGBS bull flattened this morning, with the major benchmarks running 0.5-2.5bp richer, aided by Tuesday’s bid in U.S. Tsys (although the U.S. curve bull steepened on Tuesday). Futures managed to add to the overnight bid, last +24.

  • Note that the Japanese government maintained its assessment of the Japanese economy in its latest monthly observation. This comes after an upgrade of its overall economic view in April.
  • BoJ Rinban operations covering 1- to 25-Year JGBs provided little impetus for market, although there may have been some incremental support derived from the latest round of BoJ purchases.
  • There wasn’t any meaningful macro reaction to the latest round of North Korean missile launches, which drew the usual rounds of condemnation from Japanese officials, as well as fresh warnings re: the potential for nuclear tests on the Korean peninsula.
  • Services PPI data and 40-Year JGB supply headline domestically 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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