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Offered, But Up From Session Lows,


The post lunch break tone to JGB futures has been skewed lower, although we are up from session lows. JBH4 was last 146.46, -.29, session lows coming in at 146.36.

  • There has been spill over from weaker US Tsys, TYH4 close to Thursday lows at the time of writing.
  • Lower bid to cover ratios at the 3m bill sale and the enhanced liquidity auction may have also contributed to the offered tone post the break.
  • As noted earlier, we had Nov National CPI on expectations, but the detail showed some underlying pressures. The MUFG CEO also stated earlier that there's a "fair chance" the BoJ ends negative rates in Jan (Asahi, see this link).
  • In the cash JGB space, the 10yr yield sits near 0.63% slightly below session highs. Yield gains remain firmer in the 20-40yr tenors. The 10yr swap rate is above 0.83% in latest dealings.
  • A reminder that BoJ Governor Ueda speaks on Christmas day (next Monday) at the Keidanren meeting in Tokyo (no time is given for the speech at this stage).

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