Off Lows

Tokyo morning trade initially saw a modest extension lower for JGB futures as local participants caught up to broader market developments as they returned from holiday, although the contract recovered from session lows as a light bid crept into the U.S. Tsy space. That left the contract -14 come the bell, while cash JGB trade sees the major benchmarks sit flat to 1bp cheaper across the curve.

• Offer/cover ratios from today's BoJ Rinban operations can be seen below:
• 1- to 3-Year: 3.02x (prev. 3.02x)
• 3- to 5-Year: 1.67x (prev. 2.80x)
• 5- to 10-Year: 1.87x (prev. 1.84x)
• There may be some modest support for the 3- to 5-Year zone of the curve given the above results.
• Local headline flow remains light, outside of Japanese Finance Minister Yamagiwa pointing to a focus on all market pertinent matters when it comes to the recent movements in the JPY.